$NUE bulls rack up hefty gains

Option traders more than doubled their money in Nucor today.

On Feb. 12, Investitute’s tracking systems found that 6,000 Weekly $65 calls expiring on March 2 were purchased for $1.36 to $1.54 with shares at $63.75. Open interest in the strike was a mere 4 contracts before that session began, showing that this was fresh buying.

Those calls traded for $3.50 this afternoon, more than 2.5 times their original purchase price. The stock rose 6.8% in the same time frame, reflecting 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.

NUE rose to $68.21 today before pulling back with the broader market to close at $66.85, down 1.05%. The company has rallied with other U.S. steel producers as the White House considers anti-dumping regulations agains foreign rivals.