$DLTR call prices double

Bullish option traders are ringing up big profits in Dollar Tree (DLTR) today.

On Aug. 7, Our market scanners found that 3,000 Weekly $98 calls expiring on Sept. 6 were bought for $2.60 to $2.65 as part of a bullish spread with shares at $93.04. Open interest in the strike was a mere 21 contracts before the trade, showing that this was a new position.

Those calls traded for as much as $6 this morning, more than twice their purchase price. The stock rose 12% in the same time period, 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.

DLTR reached $104.23 early today but pulled back with the broader market to $100.20 in midday trading, still up 0.65% on the session. The discount retailer rallied on strong sales numbers this morning.