Call buyers score a double in $KEY

Option traders doubled their money in KeyCorp today as the financial sector lifted.

On Apr. 24, Investitute’s market scanners showed that 2,000 May $17.50 calls were purchased for $0.18 to $0.22 with shares at $16.89. These were clearly new positions, as volume in the strike was a mere 293 contracts before the trades occurred.

Those calls traded up to $0.43 today, twice their average purchase prices. The stock rose 3.97% in the same time frame, illustrating the kind of leverage that can 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.

KEY moved higher to close at $17.54, up 1.45% on the day. The regional bank, which reported earnings on April 18, has rallied after announcing an up to $1 billion share repurchase program.