Skechers bulls sprint for quick win

Option traders have tripled their money in just a few days with bullish positions on Skechers USA.

On May 23, Investitute’s tracking systems identified the purchase of 2,800 June $23 calls for $1.05 to $1.15 with shares at $23.50. These were clearly new positions, as volume was more than 10 times the strike’s open interest.

Those calls traded as high as $3.20 this morning, tripling in value just three sessions later. The stock rose less than 10.5 percent in the same time, underscoring how far options can outperform their underlying shares.

Long calls lock in the price where investors can buy a stock, letting them position for a rally at limited cost with the potential for significant leverage. They carry less risk than owning shares because the most that can be lost is the price of the options no matter how far the stock might fall.

SKX was up 2.57 percent today to close at $25.51. The shoe retailer bounced off the $23 level early last week and has rallied with takeover speculations.