$ELY call buyers swing overnight profits

Option traders are scoring big gains on upside positions in Callaway Golf Co (ELY) today.

On Sep. 15, Market Rebellion’s UOA Service identified the purchase of 2,200 September $30 calls, expiring tomorrow, for $0.45 to $0.65 with shares at $29.97. This was clearly a new position, as open interest in the strike was only 2,244 contracts before the trade occurred.

Those calls changed hands for $1.75 this session, more than 2.5 times their purchase prices. The stock rose 5.74% in the same time frame, 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.

ELY was last higher on the day by 3.32% at $31.09.