$LOW bulls double money intraday

Bullish option traders built fast profits on upside positions opened in Lowe’s (LOW) this morning after its earnings report.

Just this morning, on Aug. 18, Market Rebellion’s Unusual Activity Service detected the purchase of 4,700 August $195 calls, expiring this Friday, for $0.63 to $3.36 with shares at $189.07. Open interest in the strike was just 3,138 contracts before that session began, showing that this was fresh buying.

Those calls traded for as much as $9.24 today, at least double their purchase prices.  The stock rose 7.65% in the same time period, a huge move but still nowhere near that of its options on a relative basis.

This is the second winning trade in the name posted on Market Rebellion in as many sessions, after bears built profits of their own yesterday.

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.

LOW settled at $199.73, up 9.62% today. The home-improvement retailer topped earnings and guidance estimates before the opening bell.