$MIC bulls double their money

Option traders are cashing in big profits on upside positions in Macquarie Infrastructure Corporation (MIC) today.

On Oct. 29, Market Rebellion’s tracking systems detected the purchase of 5,300 November $40 calls for $0.62 to $0.72. The trade was part of a bullish spread with shares at $39.10 and open interest in the strike before the trade occurred was just 2,298, indicating that this was a new position.

Those calls are currently marked for $1.90, more than 2.5 times their average purchase price. The stock rose 7.34% in the same time frame, 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.

MIC is up 0.99% to $41.97 in midday trading. The diversified infrastructure investor announced on Oct. 31 that it intends to pursue strategic alternatives to unlock value for shareholders.