$FB keeps paying off for bulls

It took barely a week for option traders to rack up large profits on upside positions in Facebook.

On March 26, Investitute’s market scanners showed that 3,000 Weekly $170 calls expiring on May 3 were bought for $6.51 to $7.30 with shares at $168.72. This was clearly fresh buying, as open interest in the strike was a mere 108 contracts before that session began.

Those calls traded for as much as $12.10 today, nearly twice their initial purchase price. The stock rose 5.46% 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 days and the third in the last month.

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.

FB was up 1.43% to $176.02 today. Guggenheim upgraded the social network to “buy” from “neutral” this morning and raised its price target to $200 from $175.