Last-minute play wins in Mattel

It took less than one session for bullish traders to make big money on Mattel.

Just before yesterday’s closing bell, Investitute’s market scanners identified the purchase of 2,200 June $21.50 calls for $0.75 to $0.80 with shares at $21.64. This was clearly fresh buying, as open interest in the strike was only 100 contracts before the trades occurred.

Today those calls traded up to $1.34, nearly doubling in value. The stock was up just 3.84 percent in the same time, underscoring the kind of leverage that can be achieved through options.

Long calls lock in the price where the 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.

MAT rose 3.03 percent to $22.41 today. The toy maker rallied after DA Davidson initiated coverage on the company with a “buy” rating and a $30 price target, saying it owned “the most valuable portfolio” of brands within the industry.