Bulls score big win in $ROK

Option traders have doubled their money on upside positions in Rockwell Automation (ROK).

On Sept. 11, Market Rebellion’s tracking systems detected the purchase of 2,000 January $190 calls for $7.20 as part of a bullish spread with shares at $184.87. This was clearly a new position, as open interest in the strike was only 214 contracts before that session began.

Those calls traded for as much as $14.74 today, more than double their purchase price. The stock rose 8.17% 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.

ROK reached a session high of $201.10 earlier today before pulling back with the broader market to close at $198.07, still up 0.03% on the day. The industrial-automation company reported strong quarterly results and issued a positive outlook yesterday morning.