$KO bulls double their money

It took barely a week for upside option traders to turn substantial gains in Coca-Cola.

On Oct. 31, Investitute’s market scanners identified the purchase of 15,000 February $48 calls for $1.30 as part of a bullish roll with shares at $47.45. This was clearly a new position, volume was far above the strike’s open interest of 8,272 contracts before that session began. Investitute co-founder Pete Najarian cited the unusual activity at that time on CNBC’s “Halftime Report.”

Those calls traded up to $2.60 today, twice their purchase price. The stock rose 5.1% 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.

KO was up 0.71% today to close at $49.68. The beverage icon has rallied sharply since quarterly earnings and revenue beat estimates on Oct. 30.