$DWDP is right formula for bulls

Short-term options in DowDuPont are paying off for the second day in a row.

On April 9, Investitute’s proprietary programs identified the purchase of 2,500 18April $38 calls for $0.55 to $0.70 with shares at $38.09. Open interest in the strike was only 490 contracts before the trades occurred, showing that this was fresh buying.

Those calls traded up to $1.31 today, more than twice their average purchase price. The stock rose 3.12% in the same time frame, illustrating the kind of leverage that can be achieved with options.

It is the second winning trade in the name posted on Investitute in as many sessions.

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.

DWDP was up 0.13% to $39.20. The chemical company’s shares are up sharply since rebounding from a key support level at the end of March.