$ERI bulls stay for more profits

Eldorado Resorts (ERI) has had a hot hand these past couple weeks, dealing big profits to bullish option positions opened near the March lows.

On Mar. 19, Market Rebellion’s Unusual Option Activity Service detected the purchase of 2,000 June $15 calls for $2.60 to $2.10 with shares at $7.74. This was clearly fresh buying, as open interest in the strike was just 1 contract before that session began.

Those calls closed marked for $19.90 today, more than 7.5 times their purchase price. The stock rose 354.26% in the same time frame, a huge move but still nowhere near that of its options.

It marks the second winning trade in the name to be posted on Market Rebellion in as many sessions.

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.

ERI was higher by 4.83% today closing at $35.16. The domestic casino operator rose along with its peers as the U.S. economy reopens in stages.