$NCR bulls check out big profits

Option traders are turning large profits on upside positions in NCR Corporation (NCR) today.

On Mar. 15, Market Rebellion’s UOA tracking systems detected the purchase of 2,200 May $37 calls for $3.30 to $3.60 with shares at $37.74. Volume was well above the strike’s previous open interest of 15 contracts, showing that this was fresh interest.

Those calls were last marked for $12.00 today, over 3 times their purchase prices. The stock rose 30.63% in the same time frame, a large move but nowhere near that of its options on a relative basis.

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.

NCR was last up 2.05% to $49.30 today. The self-service kiosks and point-of-sale terminal manufacturer said on Tuesday that its shareholders approved the deal to acquire Cardtronics ($CATM).