Bulls triple their money in $ANF overnight

Abercrombie & Fitch (ANF) has paid off on upside option positions today for bullish traders.

Just yesterday on May. 25, Market Rebellion’s Unusual Activity Service found that 3,748 Weekly $38.50 calls, expiring this Friday, May 28, were bought for $1.72 with shares at $37.48. This was clearly fresh buying, as open interest in the strike was just 35 contracts before the activity appeared.

Those calls have traded for as much as $5.30 so far today, over 3 times their purchase price. The stock rose 16.49% 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.

ANF was last trading for $41.64, up 9.32% on the session. Quarterly results for the retailer reported before the market open today beat estimates on both the top and bottom lines.