Bulls triple money in $TLRD

Tailored Brands has proven to be a good fit for upside option traders.

On Aug. 22, Investitute’s market scanners identified the purchase of 1,700 September $23 calls for $1.80 to $1.90 with shares at $22.22. This was clearly fresh buying, as volume was well above the strike’s open interest of 1,011 contracts before that session began.

Those calls sold for $5.71 this morning, more than 3 times their purchase prices. The stock rallied 29.25% in the same time period, a large gain but nowhere near that of its options.

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.

TLRD surged 9.86% to $26.30 today. The clothing retailer, whose brands include Men’s Wearhouse and Joseph A. Banks, topped earnings estimates after the market closed yesterday.