Calls score big with Under Armour

A bullish position in Under Armour paid off today after earnings beat estimates.

On Monday, Investitute’s proprietary systems found that 2,200 May $21 calls were purchased in one print for $0.48 while shares traded for $19.33. There was no open interest in the strike before the session began, showing that this was fresh buying.

Those calls traded for as much as $1.43 today, tripling in value in less than four sessions. The stock gained 12 percent in that same time frame but paled by comparison, underscoring the type of leverage that can be achieved with options.

Long calls lock in the price where the stock can be purchased, gaining with a rally and providing leverage to the underlying shares. But the contracts can quickly lose value if the stock stalls or pulls back.

UAA rose 9.94 percent today to close at $21.67. The athletic-apparel retailer has lost more than half its market value in the last year but surged this morning after reporting a loss that was narrower than expected.