$BURL calls post 4-fold gains

Bullish option traders are ringing the register with big profits in Burlington Stores today.

On April 5, Investitute’s proprietary programs identified the purchase of 2,312 May $165 calls for $3.30 as part of a bullish spread with shares at $157.58. Open interest in the strike was a mere 15 contracts before that session began, showing that this was a new position.

Those calls sold for $13 today, about 4 times their purchase price. The stock rose 12.08% in the same time period, underscoring how 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.

BURL climbed to $179 this morning–within a dollar of its 52-week high from mid-November–before pulling back to close at $175.77, off 0.5% on the session. The apparel retailer lowered guidance but rallied yesterday after naming new CEO Michael O’Sullivan, formerly chief operating officer of Ross Stores.