$MNST call prices triple intraday

Option traders who opened bullish positions in Monster Beverage this morning were posting substantial gains just a few hours later.

Less than 45 minutes into today’s session, Investitute’s tracking systems found that 4,900 Weekly $55 calls expiring on June 29 were purchased for $0.27 to $0.33 with shares at $51.04. This was clearly fresh buying, as open interest in the strike was a mere 16 contracts before the activity appeared. Investitute co-founder Pete Najarian cited the unusual activity on CNBC’s “Halftime Report” today.

Those calls traded up to $0.75 by early afternoon, nearly 3 times their initial purchase price, with volume more than doubling to about 10,500. The stock rose 2.8% at the same time, illustrating the kind of leverage that can be achieved quickly 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.

MNST jumped 5.42% to $51.96 today. The energy-drink maker rallied after announcing a $500 million share-buying program this morning.