$JWN bulls quadruple money

Option traders are ringing up big profits in Nordstrom (JWN) today.

On Sept. 5, Market Rebellion’s tracking systems showed that 2,000 Weekly $31 calls expiring this Friday were bought for $0.70 as part of a bullish roll with shares at $30.70. This was clearly a new position, as open interest in the strike was a mere 197 contracts before the trade occurred.

Those calls are marked at $3.20 now, more than 4.5 times their purchase price. The stock rose 11.86% 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.

JWN is up 0.64% to $34.46 this morning. The retailer, which has been the subject of deal speculation, has rallied with other names in the space in recent weeks.