$CZR bulls hit jackpot again

Option traders have quadrupled their money on upside bets in Caesars Entertainment (CZR).

On June 19, Investitute’s proprietary programs flagged the purchase of 36,500 July $10 calls for $0.45 to $0.56 with shares at $10.03. Volume was well above the strike’s previous open interest of 28,626 contracts, indicating that this was fresh buying.

Those calls sold for $2.19 today, more than 4 times their average purchase price. The stock rose 21.64% in the same time period, a large move but nowhere near that of its options on a relative basis.

It is the second winning trade in the name posted on Investitute in as many weeks.

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.

CZR reached a session high of $12.21 this morning, just shy of the 52-week high of $12.23 reached in the previous session, and is now off 0.7% on the day to $12.09. The stock rallied sharply on June 24 on news that Eldorado Resorts (ERI) is buying the rival casino operator for an estimated $17.3B.