$KDP bulls triple money

Option traders are logging large profits in Keurig Dr Pepper (KDP) today.

On Nov. 6, Market Rebellion’s Unusual Option Activity Service identified the purchase of 4,000 December $29 calls for $0.60 to $0.70 with shares at $28.09. This represented fresh buying, as volume was well above the strike’s previous open interest of 378 contracts.

Those calls are marked for $2.10 today, more than 3 times their purchase prices. The stock rose 10.54% in the same time frame, illustrating 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.

KDP is currently trading for $31.05, off 0.54% on the session. The beverage-maker conglomerate beat earnings expectations and backed guidance in its last quarterly report on Nov. 7.