Traders double their money in $WBA

Walgreens Boots Alliance reported strong quarterly numbers today, returning big profits on option positions opened less than a week ago.

Last Friday, Investitute’s proprietary programs found that 5,600 Weekly $68 calls expiring on Oct. 27 were purchased for $1.14 to $1.85 with shares at $67.89. Open interest in the strike was only 432 contracts before the activity appeared, showing that this was fresh buying.

This morning those calls traded for $2.51, more than double their original purchase price. The stock rose 2.2 percent in the same time period, illustrating the kind of leverage that can be achieved through 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.

WBA was up 3.08 percent to close at $69.36 today. The pharmacy chain’s earnings and guidance exceeded expectations this morning.