Bulls double their money in $TGT

Option traders rang the register on large profits in Target today.

On Jan. 25, Investitute’s market scanners identified the purchase of 11,965 July $82.50 calls bought for $1.63as part of a bullish roll with shares at $72.15. This was clearly a new position, as open interest in the strike was a mere 168 contracts before the trade occurred.

Those calls sold for $3.50 today, more than twice their purchase price. The stock rose 12.71% inthe same time period, underscoring how options can far outperform their underlying shares.

It was the second winning trade in the name posted on Investitute in the last month.

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.

TGT reached a session high of $81.58 this morning before pulling back to close at $80.94, off 0.54% on the day. The discount retailer issued a positive outlook after reporting strong earnings and sales on March 5.