$FDX calls double overnight

Option traders collected large profits in FedEx today, only one session after opening bullish positions in the name.

Just yesterday, Investitute’s tracking systems detected the purchase of 5,000 October $250 calls for $3 to $3.45 as part of a bullish spread with shares at $246.15. This was clearly a new position, as volume was far above the strike’s open interest of 2,973 contracts before the trade occurred. Investitute co-founder Jon Najarian cited the unusual activity at that time on CNBC’s “Halftime Report.”

Those calls sold for $6 this morning, twice their initial purchase price. The stock rose 1.9% at the same time, illustrating the kind of leverage that can be achieved quickly 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.

FDX jumped to $250.95 this morning before pulling back to close at $247.32, up 0.21% on the session. The delivery giant fell after announcing quarterly results in the post-market on Sept. 18, and the October call buyers jumped in yesterday to take advantage of the stock’s bounce.