$DAL bulls double money in hours

Bullish option positions opened this morning in Delta Air Lines were already yielding significant gains by the afternoon.

This morning, Investitute’s tracking systems detected the purchase of 3,900 May $54 calls for $0.23 to $0.28 with shares at $52.45. These were clearly new positions, as open interest in the strike was only 771 contracts before the session began. Investitute co-founder Jon Najarian cited the unusual activity on CNBC’s “Halftime Report” today.

Those calls traded up to $0.45 by the afternoon, just shy of twice their initial purchase price. The stock rose 1.2% at the same time, illustrating the kind of leverage that can be obtained quickly with options.

Rival American Airlines also had winning option trades intraday. Our scanners found that 1,900 Weekly $43.50 calls expiring on Friday were purchased for $0.21 to $0.25 this morning with shares at $42.60. Those calls traded up to $0.90 by the afternoon, quadrupling in value.

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.

DAL was up 0.91% to close at $52.37 today, while AAL advanced 1.32% to $43. The companies rallied another with other airline carriers as the price of oil pulled back before President Trump’s announcement on Iran sanctions this afternoon.