$CROX bulls double money

Option traders posted quick gains on upside positions in Crocs (CROX).

On July 8, Investitute’s tracking systems detected the purchase of 5,000 August $20 calls in one print for $2 with shares at $20.69. Open interest in the strike was a mere 50 contracts before the trade occurred, showing that it was a new position.

Those calls traded up for $4.02 today, twice their purchase price. The stock rose 14.26% 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.

CROX is up 0.61% to $23.27 this afternoon. The shoe retailer rallied last week after Piper Jaffray upgraded the name to “overweight” from “neutral” and raised its price target to $27 from $22.