$HTZ bulls drive home big profits

It took barely a week for option traders to triple their money in Hertz.

On Feb. 14, Investitue’s tracking systems detected the purchase of 3,000 March $21 calls as part of a bullish roll with shares at $17.89. bought for 0.77 to 0.84 above open interest of 3,197 contracts, 3,000 April 24 calls sold for 0.50 to 0.55 above open interest of 1,026. Stock 17.89. EPS *estimated* 2/26 after close. Calls rolled down and in.

Those calls traded as high as $2.30 today, 3 times their original purchase price. The stock rose 19.3% in the same time frame, illustrating the kind of leverage that can be achieved 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.

HTZ spiked higher by 15.7% today to close at $20.56. The car-rental company surged after rival Avis Budget reported surprisingly strong quarterly results. Hertz is scheduled to announce its own earnings on Tuesday, Feb. 27, after the market closes.