Bulls take fast profits in $KTOS

It took only 24 hours for option traders to triple their money on upside positions in Kratos Defense & Security.

Just yesterday, Investitute’s market scanners identified the purchase of 2,900 June $17.50 for $0.60 as part of a bullish roll with shares at $16.84. This was clearly a new position, as open interest in the strike was only of 844 contracts before that session began.

Those calls sold for $1.90 just before today’s closing bell, more than 3 times their purchase price. The stock rose 13.72% at the same time, underscoring how quickly options can far outperform their underlying shares.

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.

KTOS jumped 7.52% to $19.15 today, closing a penny off a 52-week high reached just 2 minutes earlier. The satellite and drone company topped quarterly estimates and issued an optimistic outlook yesterday.