Bulls triple money in $MLCO

Option traders drew winning hands in Melco Resorts & Entertainment (MLCO) today for the second session in a row.

On Dec. 12, our Unusual Activity Service detected the purchase of 14,473 January $23 calls bought in one print for $0.60 above open interest of 309 contracts with shares at $22.09. Market Rebellion co-founder Jon Najarian cited the unusual activity at that time on CNBC’s “Halftime Report.”

Those calls have traded for as much as $1.98 so far today, more than 3 times their purchase price. The stock rose 11.23% in the same time frame, underscoring how quickly options can far outperform their underlying shares.

It is the second winning trade in the name posted on Market Rebellion in as many days.

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.

MLCO is up 1.33% to $24.41 this afternoon. The company has rallied sharply along with other casino operators since China announced plans to make gambling capital Macau a major financial center.