$DKNG bulls score fast gains

It took less than 24 hours for option traders to score fast gains on upside positions in DraftKings (DKNG).

Yesterday afternoon on Sep. 8, Market Rebellion’s Unusual Activity Scanners showed that 5,000 September $40 calls were bought for $1.59 to $1.79 as part of a bullish spread with shares of $37.67.

Those calls traded for as much as $2.85 today, nearly double their initial purchase price. The stock rose 8.26% in the same time frame, illustrating how quickly options can far outperform their underlying shares.

It is the second winning trade in the name posted on Market Rebellion this month.

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.

DKNG ended the session up 9.11% to $40.38. The sports betting company was initiated at Evercore ISI this morning with an Outperform rating and $60 price target.