Calls score fast money in $DISCK

Option traders have doubled their money on bullish positions opened in Discovery Communications just one week ago.

Last Friday, Investitute’s proprietary programs cited the purchase of 5,000 March $22.50 calls for $1.10 as part of a bullish spread with shares at $19.42. Volume was well above the strike’s open interest of 3,512 contracts, showing that this was a new position. Investitute co-founder Jon Najarian cited the unusual activity at that time on CNBC’s “Halftime Report.”

Those calls traded for $2.15 this morning, doubling their purchase price. The stock rose 15.7 percent in the same time frame, illustrating the kind of leverage that can be obtained through options. Najarian updated the winning trade on CNBC yesterday afternoon.

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.

DISCK was up 1.4 percent to close at $22.47 today. The media company has rallied sharply in the last week amid continuing merger activity in the industry.