Bulls triple their money in $FRO

It took less than two weeks for upside option traders to collect big profits in Frontline (FRO).

On Mar. 6, Market Rebellion’s Unsual Activity tracking systems found that 3,950 April $8 calls were bought for $0.30 to $0.45 with shares at $6.72. This was clearly a new position, as open interest in the strike was only 150 contracts before the trade occurred.

Those calls traded for $1.60 this morning, more than 3.5 times their purchase prices. The stock rose 23.36% 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.

FRO was last lower this session by 11.98% to $8.23 today. The Berumda-based company rallied off near-52-Week lows last week, delivering nimble option traders upside opportunity, but has since pulled back with the rest of the market as macroeconomic concerns surrounding growth remain.