Option bulls double their money in $XLV

Option traders have doubled their money in the SPDR Health Care Fund (XLV).

On Jun. 23, Market Rebellion’s Unusual Activity Service found that 15,500 July $126 calls, expiring today, were bought for $1.08 to $1.25 above the previous open interest of 11,161 with shares at $124.61.

Those calls have traded for $2.97 this afternoon, more than 2 times their purchase prices. The stock rose 3.51% 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.

XLV is currently higher on the session by 0.56% at $128.99.