$DPZ bulls double their money

Bulls doubled their money in winning upside option positions on Domino’s Pizza (DPZ) today.

On Oct. 31, Market Rebellion’s Unusual Activity Scanners identified the purchase of 2,033 December $270 calls, as part of a bullish roll, for $12.00 with shares at $272.26. This was clearly a new position, as open interest in the strike was a mere 381 contracts before the trade occurred.

Market Rebellion co-founder Pete Najarian cited the unusual activity at the time on CNBC’s “Halftime Report.”

Those calls traded for as much as $27.71 this morning, more than twice their purchase price. The stock rose 9.27% in the same time period, an impressive move but nowhere near the gains in its options.

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.

DPZ is currently trading for $294.81, up 0.17% on the day. The multinational pizza restaurant chain’s price target was raised this morning to $325 from $295 by Oppenheimer.