$FINL bulls triple their money

Upside option positions sprinted higher in The Finish Line on merger news today.

On Feb. 26, Investitute’s market scanners identified the purchase of 2,500 April $12 calls for $0.60 with shares at $11.23. Those were clearly new positions, as open interest in the strike was only 608 contracts before the activity appeared.

Those calls sold for $1.85 at the end of today’s session, 3 times their purchase price. The stock rose 23.4% in the same time, a large move but nowhere near that of its options.

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.

FINL rocketed 31.09% to $13.83 today. The shoe retailer rallied on news that U.K.-based JD Sports Fashion is buying the company for $558 million.