Bulls double money in $XLU

Option traders have turned sizable profits on upside positions in the SPDR Utilities Fund.

On Nov. 12, Investitute’s proprietary programs flagged the purchase of 10,000 December $55 calls for $1.01 as part of a bullish roll with shares at $54.85. Volume was above the strike’s open interest of 8,266 contracts, showing that it was a new position.

Those calls traded for $2 today, twice their purchase price. The stock rose 3.66% in the same time frame, illustrating the kind of leverage that can be achieved with options.

Long calls lock in the price where a stock can be purchased, gaining with a rally and providing leverage to the underlying shares. The contracts can quickly lose value if the stock stalls or pulls back but also carry less risk than owning the shares themselves.

XLU was up 0.41% to $56.80 today. Investors have turned to utilities in recent months as a safe-haven trade amid the volatility in the markets.