Traders ring the register at $M

Short-term bullish option positions opened in Macy’s just two days ago are already yielding substantial profits.

On April 2, Investitute’s market scanners found that 3,000 Weekly $24 calls expiring this Friday were bought for $0.72 to $0.86 with shares at $24.64. Volume was above the strike’s open interest of 2,799 contracts, indicating that this was fresh buying.

Those calls traded for as much as $2.01 in the last hour of today’s session, 2.5 times their average purchase price. The stock rose 5.48% in the same time frame, showing how quickly options can far outperform their underlying shares on a relative basis.

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.

M jumped 5.61% to $25.99 today. This morning the department-store operator disclosed that compensation for CEO Jeff Gennette was raised 18% to $12.7 million for 2018 after the company fulfilled eight of nine performance goals outlined a year ago.