$JWN calls double in hours

Option traders who opened bullish positions in Nordstrom (JWN) this morning were collecting big gains by the afternoon.

Barely half an hour into the session, Investitute’s tracking systems detected the purchase of 6,000 June $32.50 calls for $0.32 to $0.75 above open interest of 333 contracts with shares at $32.83. Investitute co-founder Jon Najarian cited the unusual activity on CNBC’s “Halftime Report.”

Those calls traded for as much as $1.14 this afternoon, more than twice their average purchase price. The stock rose 1.64% at the same time, showing how quickly 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.

JWN was up 3.24% to $33.17 today. The struggling upscale retailer saw shares rally apparently on deal speculation.