Calls hit quick jackpot in $CZR

It took less than a week for option traders to more than double their money in Caesars Entertainment.

Last Friday, Investitute’s market scanners identified the purchase of 5,000 March $12 calls for $0.50 and $0.55 as part of a bullish roll with shares at $12.05. This was clearly a new position, as open interest in the strike was only 303 contracts before the trade occurred.

Those calls traded for $1.25 today, 2.5 times their original purchase price. The stock rose 10% in the same time frame, showing the kind of leverage that can be achieved 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.

CZR was up 0.8% today to close at $12.60. The casino operator reported last night that it had swung to a profit in the fourth quarter.