$KORS bulls double their money in days

It took less than a week for option traders to post big gains in upside positions on Michael Kors.

Last Thursday, Investitute’s market scanners spotted the purchase of 7,500 November $47.50 calls in one print for $1.40 with shares at $44.27. This was clearly a new position, as open interest in the strike was only 719 contracts before the trade occurred.

Today those calls traded up to $2.90, more than doubling in value. The stock rose 6.4 percent in same time frame, showing how quickly options can outpace gains in their underlying shares. It was the third winning call trade in the name since early August.

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.

KOR, which rallied on strong quarterly numbers last month, was up 3.43 percent today to close at $46.18. Oppenheimer upgraded the upscale apparel retailer to “outperform” from “perform” with a $55 price target before the market opened.