Bulls triple money in $SKX

Option traders scored big profits today on upside positions in Skechers USA (SKX).

On Jan. 31, Market Rebellion’s Unusual Activity tracking systems detected the purchase of 4,300 February $42 calls for $0.80 to $0.90 above open interest of 999 contracts, with shares at $37.78.

Those calls traded for as much as $3.00 so far today, over 3 times their purchase prices. The stock rose 17.39% 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 opened to an intraday high of $44.50 but has since pulled back, last up 4.56% to $39.70 in afternoon trading. The shoe retailer beat bottom line earnings estimates after the market closed yesterday.