Calls score huge profits again in $CL

Bullish option traders doubled their money in Colgate-Palmolive (CL) today, for a second time.

On Feb. 11, Investitute’s tracking systems detected the purchase of 20,030 August $67.50 calls, as part of a bullish roll, for $2.95 with shares at $65.43. This was clearly new positioning, as volume was far above the strike’s previous open interest of 112 contracts.

This fresh position appeared to be a roll from a previous winning trade, found by Investitute’s trackers, in Colgate, indicating traders were expecting a further move for the shares.

Those calls sold for $7.65 today, more than double their purchase prices. The stock as risen 14.98% 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.

CL is currently trading lower on the day, down by 0.64% at $75.06 but only after reaching a new 52-Week high this morning of $76.41. The consumer-products company reported quarterly earnings before the opening bell, backing its guide for the rest of the fiscal year.