Bulls double their money in $JBHT

Option traders have seen substantial gains in J. B. Hunt ahead of quarterly results.

On Apr. 11, Investitute’s proprietary programs flagged the purchase of 3,650 18April $105 calls for $1.75 with shares at $103.85. Open interest in the strike was 3,864 contracts before that session began, but this was clearly fresh buying, as Investitute’s proprietary algorithm had recorded buying in the same strike during the previous session.

Those 18April $105 calls traded for as much as $4.07 this morning, twice their purchase price. The stock rose 3.15% in the same time period, 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.

JBHT rose in early trade today to a high of $107.33 before pulling back to close down by 1.11% at $105.50 as traders took profits ahead of Q1 results. The trucking and transportation company continued lower in the after-hours session after missing on both its top and bottom lines.