Calls double overnight in $HLT

Option traders posted large profits today on bullish positions opened in Hilton Worldwide just 24 hours earlier.

Just yesterday, Investitute’s tracking systems detected the purchase of 10,261 April $75 calls as part of a bullish roll with shares at $2.44 and $2.45 with shares at $76.07. This was clearly a new position, as volume was well above the strike’s open interest of 2,648 contracts. Investitute co-founder Jon Najarian cited the unusual activity at that time on CNBC’s “Halftime Report.”

Those calls traded for $5.40 today, more than double their purchase prices. The stock rose 5.4% at the same time, showing how quickly 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.

HLT jumped 6.13% to $79.61 today. The hotel operator, which will report earnings on April 26 before the market opens, announced a secondary-stock offering at $73 per share yesterday.