$KO bulls quadruple their money

Bulls have more than quadrupled their money on Coca-Cola (KO) in upside option positions opened a day after its earnings report.

On Feb. 15, Investitute’s market scanners identified the purchase of 15,000 August $48 calls for $0.96 as part of a bullish roll with shares at $45.68. This was clearly a new position, as volume was far above the strike’s open interest of 457 contracts before that session began.

Those calls traded up to $4.15 today, more than 4 times their purchase price. The stock rose 13.81% 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 0.6% today to close at $51.64. The beverage icon has rallied sharply since falling after its quarterly earnings report on Feb. 14.