Bulls quadruple money in $KR

It took less than 24 hours for traders to ring up big profits in Kroger.

Just yesterday afternoon, Investitute’s market scanners found that 10,000 Weekly $27 calls expiring tomorrow were purchased for $0.57 as part of a bullish spread with shares at $26.31. Open interest in the strike was only 4,796 contracts before the trade occurred, showing that this was a new position.

Those calls sold for $2.50 this morning, more than 4 times their purchase price. The stock rose 12% at the same time, underscoring how quickly options can far outperform their underlying shares.

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.

KR surged 9.74% today to close at $28.73. The grocery chain topped earnings and sales expectations this morning.