Hartford bulls double their money

Traders posted substantial profits in upside option positions on Hartford Financial Services today, thanks to strong quarterly results.

On June 12, Investitute’s market scanners showed that 4,750 Weekly $52.50 contracts expiring this afternoon were purchased for $0.97 as part of a bullish roll with shares at $51. This was a new position, as there was no open interest in the strike before the trade occurred.

Those calls traded as high as $2.47 this morning, more than doubling in value. The stock rose less than 8 percent in the same time frame, showing how options can far outperform 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.

HIG rose 3.59 percent to $54.82 today, its highest close since the financial crisis of September 2008. The insurance and financial firm beat earnings expectations yesterday afternoon.