$KO calls up 5-fold in a day

It took bullish option traders barely 24 hours to turn huge profits in Coca-Cola (KO).

Just yesterday, Investitute’s tracking systems showed that 3,000 Weekly $52 calls expiring on Aug. 2 were bought for $0.43 and $0.44 with shares at $51.18. This was clearly a new position, as open interest in the strike was only 724 contracts before the trade appeared.

Those calls traded for as much as $2.40 today, 5.5 times their purchase prices. The stock rose 5.92% at the same time, underscoring 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.

KO is up 5.67% to $54.12 this afternoon. The beverage icon surpassed estimates on the top and bottom lines this morning.