Bulls get a double shot of $SBUX

Upside option positions in Starbucks paid off for the second time in a week today.

On Oct. 3, Investitute’s market scanners found that 3,900 Weekly $59 calls expiring on Nov. 2 were purchased for $0.40 to $0.46 with shares at $55.80. These were clearly new positions, as open interest in the strike was only 207 contracts before that session began.

Those traded up to $0.90 today, twice their purchase prices. The stock rose 3.66% in the same time frame, illustrating the kind of leverage that can be achieved with options. It was the second winning trade in the name posted on Investitute in the last five sessions.

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.

SBUX was up 1.87% to $57.81 today. The coffee giant rallied last week after activist investor Bill Ackman disclosed a $900 million stake in the company.