$RCL call buyers double their money

Bullish traders have scored big gains in Royal Caribbean since it began the month with strong quarterly results.

On June 29, Investitute’s proprietary programs cited the purchase of 3,000 August $110 calls bought for $4.45 as part of a bullish spread with shares at $109.26. Open interest in the strike was a mere 6 contracts before the trade occurred, showing that it was a new position.

Today those calls traded up to $9.72, more than doubling in value. The stock rose 9.5 percent in the same period, 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.

RCL was up 2.04 percent today to close at $119.61. The cruise-line operator beat earnings expectations and raised its outlook on Aug. 1.