Bulls triple their money in $CSCO

Cisco has come back to life in recent months, and option traders have scored big on upside positions.

On Sept. 18, Investitute’s tracking systems showed that 4,000 Weekly $33 calls that expired this afternoon were purchased for $0.19 and $0.20 as part of a bullish spread with shares at $32.59. This was clearly a new position, as open interest in the strike was only 213 contracts before the trade occurred.

Those calls ended today trading for $0.54, nearly triple their original purchase prices. The stock rose less than 3 percent in the same time period, illustrating how options can far outpace gains in their underlying shares.

Long calls lock in the price where investors can buy a stock, letting them position for a rally at limited cost with the potential for significant leverage. They carry less risk than owning shares because the most that can be lost is the price of the options no matter how far the stock might fall.

CSCO was up 0.63 percent today to close at $33.47. The network-technology giant has been rallying since holding a key support level two months ago.