$CVS bulls turn quick profits

Option traders doubled their money in CVS Health today.

On Nov. 12, Investitute’s tracking systems showed that 5,750 Weekly $80 calls expiring on Nov. 23 were purchased for $1.16 to $1.25 with shares at $79.64. This was clearly fresh buying, as open interest in the strike was only 786 contracts before the activity appeared.

Those calls traded for as much as $2.60 this morning, more than twice their purchase prices. The stock rose 2.83% in the same time frame, illustrating the kind of leverage that can be achieved quickly 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.

CVS jumped to $82.15 early this morning but pulled back with the rest of the market to close at $79.92, off 1.09% on the session. On Nov. 13, the day after the Weekly $80 were bought, Argus raised its price target on the pharmacy chain to $100 from $88.