$DLTR option bulls shop for quick gains

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

Just this morning, Sep. 29, Market Rebellion’s Unusual Activity Service found that 2,000 Weekly $94 calls, expiring this Friday, were bought for $1.10 to $2.41 above the existing open interest of 209 contracts with shares at $93.41.

Those calls traded for as much as $6.70 this morning, more than 2.5 times their purchase prices. The stock rose 7.68% 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 closed today at $100.51 up 16.49% on the session. The discount retailer rallied rallied today after its board of directors increased the company’s share repurchase authorization by $1.05 billion, to $2.5 billion.