$MMM calls surge 3-fold

Bullish option traders logged exponential profits in 3M (MMM) this morning.

On July 16, Investitute’s tracking systems cited the purchase of 2,200 August $180 calls for bought from $2.08 to $3.90 above open interest of 813 contracts with shares at $175.95. Investitute co-founder Jon Najarian cited the unusual activity on CNBC’s “Halftime Report” at that time.

Those calls traded for as much as $8.39 early today, about 3 times their average purchase price. The stock rose 6.12% 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.

MMM spiked to $187.52 right after the opening bell but pulled back with the broader market and is trading at $178.07 this afternoon, off 0.75% on the session. The industrial giant topped earnings and sales estimates before the market opened this morning.