$KO call buyers triple their money

Coca-Cola rose along with other consumer staples today, delivering large gains to upside option traders opened just a few days ago.

Last Thursday, Investitute’s tracking systems detected the purchase of 16,500 December $47 calls for $0.21 to $0.29 with shares at $46.11. These were clearly new positions, as volume was well above the strike’s open interest of 3,892 contracts.

Those calls ended trading today at $0.75, more than 3.5 times their original purchase price. The stock rose less than 3 percent at the same time, illustrating the kind of leverage that can be achieved through options.

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.

KO was up 1.52 percent today to close at $47.43. Wells Fargo upgraded the beverage icon to “outperform” from “market perform” and raised its price target to $51 from $45.