$CZR bulls hit the jackpot

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

Just yesterday afternoon, Jun. 3, Market Rebellion’s Unusual Option Activity Service detected the purchase of 9,000 Weekly $12 calls, expiring tomorrow, Jun. 5, mostly in one print of 6,815 for $0.11 to $0.15 with shares at $11.75. This was clearly fresh buying, as open interest in the strike was just 2,111 contracts before that session began.

Those calls traded up to $0.32 today, more than double their purchase prices. The stock rose 1.79% in the same time period, a large move but nowhere near that of its options on a relative basis.

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 closed the day at $12.18, up 3.57% for the day. The stock rallied sharply along with its peers, notably Eldorado Resorts (ERI), which it is in an ongoing timeline to be acquired by.