Bulls take $FHN to the bank

It took just two sessions for option traders to double their money on upside positions in First Horizon National (FHN).

On July 15, Investitute’s proprietary programs flagged the purchase of 3,500 August $15 calls for $0.40 to $0.45 with shares at $14.86. Volume was well above the strike’s previous open interest of 1,587 contracts, indicating that this was fresh buying.

Those calls traded for as much as $1.07 today, more than twice their purchase prices. The stock rose 7.4% in the same time frame, illustrating the kind of leverage that can be achieved with options.

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.

FHN is up 1.33% to $16 in midday trading. The regional bank topped earnings and revenue estimates yesterday morning.