Patient bulls score in $GIS

Option traders who opened upside positions in General Mills (GIS) just before spring began are now harvesting big rewards.

Way back on March 19, Market Rebellion’s tracking systems detected the purchase of 14,953 October $50 calls for $1.84 as part of a bullish roll with shares at $47.36. This was clearly a new position, as open interest in the strike was only 2,398 contracts before that session began.

Those calls are now marked at $6.55, more than 3.5 times their purchase price. The stock rose 18.64% in the same time period, 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.

GIS is up 2.24% to $56.19 in afternoon trading. The food company hit a 52-week high of $56.32 as investors seek the relative safety of consumer-staples names.