Bulls double money in $RTN

Option traders are posting large profits in Ratheon (RTN) for the second time in as many weeks.

On Oct. 21, Market Rebellion’s activity scanners identified the purchase of 2,936 December $210 calls as part of a bullish spread $4.70 with shares at $200.41. This was clearly a new position, as volume was well above the strike’s previous open interest of 1,849 contracts.

Those calls traded for as much as $11 today, almost 2.5 times their purchase price. The stock rose 7.02% in the same time frame, showing how options can quickly outperform their underlying shares.

It is the second winning trade in the name posted on Market Rebellion since Oct. 15.

Long calls lock in the price where investors can buy a stock, letting them position for a rally at limited cost with the potential for significant leverage. They carry less risk than owning shares because the most that can be lost is the price of the options no matter how far the stock might fall.

RTN reached a 52-week high of $215.35 this morning before pulling back to $213.20 this afternoon, still up 0.94% on the session. The defense contractor beat earnings and sales estimates yesterday morning.