Calls make bank on $ZION

It has taken only a few days for bullish option traders to more than double their money in Zions Bancorporation.

On March 27, Investitute’s tracking systems detected the purchase of 2,400 18April $47 calls for $0.34 to $0.39 with shares at $45.02. This was clearly fresh buying, as open interest in the stock was only 279 contracts before the activity appeared.

Those calls traded for as much as $0.92 this afternoon, more than 2.5 times their average purchase price. The stock rose 3.86% in the same time frame, illustrating 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.

ZION was up 2.88% to $46.72. The lender, which has been the subject of merger speculation, has rallied along with other financial names in last week.