Bulls quintuple money in $CONN

Last-minute options purchased in Conn’s yesterday turned huge profits this morning.

Less than half an hour before the closing bell yesterday, Investitute’s proprietary programs flagged the purchase of 4,600 June $29 calls bought for $0.79 to $1.15 with shares at $26.20. Open interest in the strike was only 592 contracts before the trades occurred, showing that this was fresh buying.

Those calls traded for $4 just 15 minutes into today’s session, 5 times their initial purchase price. The stock jumped 24.6% at the same time, underscoring how quickly options can far outpace gains in 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.

CONN surged 24.56% to $31.95 today. The department-store operator surpassed earnings and sales expectations this morning.