$LULU calls turn profits overnight

Bullish option traders posted substantial gains today from last-minute positions opened in Lululemon just before quarterly results last night.

Minutes before yesterday’s closing bell, Investitute’s market scanners flagged the purchase of 3,000 December $70 in one print for $2.80. The position, part of a bullish spread, occurred with shares trading at $67.62.

Today those calls sold for $4.39, a gain of more than 55 percent. The stock rose 8.7 percent in the same time, illustrating the kind of leverage that can be produced with options. Investitute co-founder Pete Najarian, who has been long Lululemon, discussed the company’s quarterly results last night on CNBC’s “Fast Money” program.

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.

LULU jumped 6.43 percent to $72.01 today. The athletic apparel retailer raised its holiday forecast after earnings and sales beat estimates in the post-market yesterday.