Calls turn quick gains in $MDT

Option traders have tripled their money on bullish positions opened in Medtronic (MDT) less than two weeks ago.

On Nov. 7, Market Rebellion’s Unusual Activity Service found that 2,082 Weekly $109 calls expiring on Dec. 13 were bought for $1.40 as part of a bullish roll with shares at $106.32. There was no open interest in the strike before the trade occurred, showing that this was a new position.

Those calls are marked at $4.23 today, 3 times their purchase price. The stock rose 5.64% in the same time frame, underscoring how quickly options can far outperform 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.

MDT is up 1.16% to $112.36 in midday trading. The medical-device maker topped earnings expectations and raised its outlook yesterday.