Bulls run with gains in $SKX

Option traders scored big profits today on upside positions in Skechers USA (SKX) opened less than two weeks ago.

On Apr. 13, Market Rebellion’s Unusual Activity tracking systems detected the purchase of 2,300 Weekly $48 calls expiring today for $0.55 to $0.65, with shares at $43.74. This was clearly fresh buying as there was no open interest in the contract before that session.

Those calls have traded for as much as $5.00 today, at least 7.5 times their purchase prices. The stock rose 18.52% in the same time frame, showing 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.

SKX was last higher by 16.33% at $51.78. The shoe retailer beat top and bottom line earnings estimates and guidance after the market closed yesterday.