Dollar bulls double money in $UUP

Option traders have doubled their money in upside option bets on the PowerShares DB U.S. Dollar Bullish Fund (UUP).

On Jun. 2, Market Rebellion’s Unusual Activity Service identified the the purchase of 15 000 July $24 calls for $0.34 to $0.37 with shares at $24.20. Volume was clearly above the previous open interest of 513 contracts, indicating that this was a new position.

Those calls traded for $0.85 today, over 2 times their purchase prices. The stock rose 2.64% at the same time, 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.

UUP was last up 0.24% today at $24.80. The exchange-traded fund tracks changes in the U.S. dollar and earlier this session made a new 2-Month high of $24.84.