Bulls driving higher in $CVNA

Option traders doubled their money in Carvana today, their third winning position in the last week.

On Jan. 7, Investitute’s market scanners identified the purchase of 4,000 August $35 calls for $7.10 to $8.60 with shares at $33.75. There was no open interest in the strike before that session began, showing that this was a new position.

Those calls traded for as much as $17.10 today, more than double their average purchase price. The stock has surged 45.69% in the same time period, a huge move but still far below that of its options on a relative basis.

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.

It is the third winning trade in the name posted on Investitute since March 1.

CVNA was up 0.24% to $49.60 today. Citi raised its price target on the name to $65 from $55 on Feb. 28 after the online car seller reported earnings.