Bulls triple their money in $SKX

Option traders scored big profits today on upside positions in Skechers USA (SKX) opened just over two weeks ago.

On May 13, Market Rebellion’s Unusual Activity tracking systems detected the purchase of 4,500 July $26 calls for $1.53 to $1.90 above open interest of 41 contracts, with shares at $24.70.

Those calls traded for as much as $7.19 today, at least 3.5 times their purchase prices. The stock rose 32.27% 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 $33.15 but pulled back with the broader market to close lower by 3.72% at $31.61. The shoe retailer beat top line earnings estimates on Apr. 23 and has had a strong move higher in recent weeks while at the same time the retail sector began to open back up to customers in stages.