Bulls triple money overnight in $KHC

It took just one session for option traders to score large gains on upside positions in Kraft Heinz (KHC).

Yesterday on Apr. 15, Market Rebellion’s Unusual Activity Scanners showed that 7,000 April $28 calls expiring tomorrow bought for $0.30 to $0.37 with shares of $27.57. This was clearly fresh buying, as open interest in the strike was only 879 contracts before the activity appeared.

Those calls traded for as much as $29.35 today, at least 3.5 times their purchase prices. The stock rose 6.46% in the same time frame, illustrating 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.

KHC ended the session up 4.21% to $29.23. The food company was raised to an Overweight from Equal Weight at Wells Fargo this morning, which also raised its price target for the shares to $38 from $28.