$DLPH calls double in days

Delphi Automotive bulls have more than doubled their money in longer-dated upside positions, just a few days after their purchase.

On April 2, Investitute’s market scanners discovered the purchase of 5,000 June $22.50 calls for $1.30, as part of a bullish spread, with shares at $20.99. Open interest in the strike was just 514 contracts before the trade occurred, showing that it was a new position.

Those calls traded up to $3.10 late today, more than twice their purchase price. The stock rose 14.82% in the same time period, underscoring how options can far outperform their underlying shares.

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.

DLPH was up 4.45% to close at $23.96 today. The vehicle powertrain manufacturer has risen significantly after KeyBank upgraded the name on March 18 to Sector Weight from Underweight.