Dollar bulls rack up gains in $UUP

Option traders have tripled their money in the PowerShares DB U.S. Dollar Bullish Fund.

On April 3, Investitute’s proprietary programs cited the purchase of 11,000 June $24 calls for $0.19-$0.20 with shares at $23.65. Volume was above the strike’s open interest of 10,505 contracts, showing that it was a new position.

Those calls traded for $0.60 today, 3 times their purchase prices. The stock rose 3.8% 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 up 0.62% today to close at $24.50. The exchange-traded fund tracks changes in the U.S. dollar.