$EXC bulls double money

Option traders scored fast gains in Exelon (EXC) ahead of quarterly results next week.

On July 24, Investitute’s tracking systems detected the purchase of 4,300 September $48 calls for $0.32 to $0.35 above open interest of 2,208 contracts with shares at $45.34. Investitute co-founder Jon Najarian cited the unusual activity at that time on CNBC’s “Halftime Report.”

Those calls traded up to $0.67 today, twice their purchase price. The stock rose 2.34% in the same time frame, underscoring how quickly options can far outperform their underlying shares.

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.

EXC reached $46.48 this morning before pulling back to traded at $46.13 this afternoon, unchanged on the day. The utility company is scheduled to report earnings before the market opens on Aug. 1.