Call buyers building gains in $BLDR

Bullish option traders took less than 24 hours to double their money in Builders FirstSource.

Just yesterday, Investitute’s proprietary programs cited the purchase of 1,500 March $20 calls in one print for $0.70 with shares at $19.31. This was clearly a new position, as open interest in the strike was a mere 86 contracts before the trade occurred.

Those calls traded up to $1.75 this afternoon, 2.5 times their purchase price. The stock rose 11.8% at the same time, illustrating the kind of leverage that be achieved quickly 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.

BLDR surged 10.48% to $21.19 today. The construction materials and services company topped estimates on the top and bottom lines after the market closed yesterday.