$CROX bulls triple money

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

On Apr, 23, Market Rebellion’s Unusual Activity Service found that 4,100 May $90 calls were bought for $2.89 to $3.21 with shares at $83.41. This was clearly fresh buying, as open interest in the strike was just 1,274 contracts before the activity appeared.

Those calls traded up for $12.40 today, over 3 times their purchase prices. The stock rose 20.97% 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 was up 15.3% to close at $97.82 this afternoon. The shoe retailer rallied this session after topping earnings estimates before the opening bell today.