Traders double their money in $PYPL

Bullish option positions rang up big profits in PayPal today at 52-week highs.

On Sept. 27, Investitute’s proprietary programs cited the purchase of 5,200 November $65 calls for $1.98 to $2.14 with shares at $63.48. These were clearly new positions, as open interest in the strike was only 741 contracts before the trades occurred.

Those calls sold for $5.07 today, more than double their purchase prices. The stock rose 8.6 percent in the same time frame, underscoring the kind of leverage that can be achieved through options.

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.

PYPL was up 1.59 percent today to close at $68.86 after reaching a 52-day high of $68.98 just minutes earlier. The electronic-payment service is scheduled to report earnings on Oct. 19 after the market closes.