$LDOS call buyers score big

Option traders doubled their money on bullish positions in Leidos that expired this afternoon.

On Feb. 9, Investitute’s proprietary programs found that 5,997 March $65 calls were purchased for $1.50 as part of a bullish roll with shares at $61.57. This was clearly fresh buying, as open interest in the strike was only 167 contracts before the trades occurred.

Those calls last traded for $3.54 yesterday, about 2.5 times their purchase price. The stock rose 11.3% in the same time frame, showing how options can far outpace gains in 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.

LDOS ended today’s session off 0.46% at $67.71. The defense-technology company was upgraded by analysts after reporting earnings last month.