$BYD bulls double their money

Option traders hit the jackpot in Boyd Gaming today.

On April 5, Investitute’s tracking systems detected the purchase of 4,000 May $35 calls for $0.89 as part of a bullish spread with shares at $32.97. Open interest in the strike was a mere 12 contracts, showing that this was a new position. Investitute co-founder Jon Najarian cited the unusual activity at that time on CNBC’s “Halftime Report.”

Those calls traded for $1.98 today, more than twice their purchase price. The stock rose 8% in the same time frame, underscoring how options can far outpace gains in 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.

BYD was up 1.86% to $35.04 today. The company has rallied along with other casino operators in recent weeks.