Calls score more profits in $CL

Bullish option traders more than doubled their money in Colgate-Palmolive today.

On Nov. 7, Investitute’s tracking systems detected the purchase of 10,000 January $70 calls bought mostly in one print of 9,500 for $0.29 to $0.31 with shares at $60.96. This was clearly new positioning, as volume was far above the strike’s previous open interest of 3,313 contracts.

Those calls traded up to $0.81 today, more than 2.5 times their purchase prices. The stock rose 3.33% in the same time frame, illustrating the kind of leverage that can be achieved quickly with options.

It was the second winning trade in Colgate posted on Investitute in as many sessions. On CNBC’s “Halftime Report” on Friday, Investitute co-founder Pete Najarian cited buying in the February $62.50 calls, which doubled in value by the end of that session.

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 rose to $63.38 early this morning but pulled back with the broader market to close at $61.35, off 3.84% on the session. The consumer-products company has rebounded since logging a 52-week low of $57.41 on Oct. 29.