$KEYS bulls turn quick gains

Option traders have more than doubled their money on upside positions opened in Keysight Technologies (KEYS) just before the company reported earnings.

On Aug. 20, Our proprietary programs flagged the purchase of 2,500 October $87.50 calls for $5.30 as part of a bullish roll with shares at $87.57 above open interest of 20 contract. Co-founder Jon Najarian cited the unusual activity at that time on CNBC’s “Halftime Report.”

Those calls traded for more than $12 today, more than twice their purchase price. The stock rose 12.15% 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.

KEYS reached a record high of $101.58 yesterday after strong quarterly results but pulled back with the broader market today, declining 7.14% to close at $93.18.