$GLD bulls stack gains

Option traders are stacking up gains on upside positions today in the SPDR Gold Trust (GLD).

On Jun. 15, our Unusual Activity Service detected the purchase of 10,000 Weekly $164.50 calls expiring on Jul. 2 for $1.47 to $1.50 as part of a bullish spread with shares at $161.64. This was clearly a new position, as open interest in the strike was only 131 contracts before that session began.

Those calls have changed hands for as much as $3.45 so far this afternoon, more than 2 times their purchase prices. The stock rose 3.8% in the same time period, underscoring how 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.

GLD was last up 0.58% to $167.60 in afternoon trading, after making a new 52-Week high of $167.99 earlier today, it’s highest level since a gap lower the morning of Nov. 28, 2012. The exchange-traded fund, which tracks the price of bullion, has rallied as investors look to the so called “safe-haven” trade amid broader equity volatility.