Call buyers come up aces in $IGT

Option traders revealed winning hands in International Game Technology today.

On Feb. 14, Investitute’s proprietary programs cited the purchase of 1,100 March $25 calls for $2.60 with shares at $26.45. There was no open interest in the strike before the trade appeared, showing that this was fresh buying.

Those calls traded for $5.30 today, doubling their purchase price. The stock rose 14.9% in the same time period, underscoring how options can outperform gains in their underlying shares. Investitute co-founder Pete Najarian cited even more call buying in choosing IGT as his final trade on CNBC’s “Halftime Report” today.

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.

IGT was up 2.74% today to close at $30.74 after reaching a 52-week high of $30.82 earlier in the session. The U.K.-based manufacturer of casino gaming systems has rallied since reporting strong quarterly results last week.