$DD bulls find big profits

DuPont (DD) made a new 52-Week high today, delivering big profits to bullish option positions.

Back on Oct. 22, Market Rebellion’s Unusual Activity Service flagged the purchase of 5,000 December $62.50 calls as part of a bullish roll for $2.01 with shares at $59.23. The open interest in the contract was just 85 before that session began, indicating that this was fresh buying.

Those calls traded for as much as $5.00 today, about 2.5 times their purchase price. The stock rose 13.96% 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.

DD closed up by 1.14% at $67.57 today after setting a new 52-Week high of $67.74 earlier in the session.