Bulls are soaring with Hawaiian

Upside option trades reached higher elevations with Hawaiian Holdings today.

Just last Friday, Investitute’s market scanners found that 2,200 July $55 calls were purchased for $1.30 to $1.40 with shares at $51.70. These were new positions, as open interest in the strike was only 794 contracts before the activity occurred.

Today those calls traded for $5.40 just before the closing bell, a gain of 300 percent in less than four full sessions. The stock rose 14.3 percent in the same time, highlighting the type of leverage that can be obtained through options.

Long calls lock in the price where the 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.

HA surged 12.30 percent today to close at $59.35. The carrier, which operates Hawaiian Airlines, rallied on strong May traffic numbers and an upward revision of its quarterly results.