Traders draw winning hands in $CZR

Option traders have doubled their money in bullish positions on Caesar’s Entertainment.

On Aug. 24, Investitute’s proprietary programs cited the purchase of 15,000 October $12 calls in one print for $0.35 with shares at $11.05. This was clearly a new position, as open interest in the strike was a mere 37 contracts before that session began.

Those calls traded up to $0.90 today, more than doubling in value. The stock rose 15.4 percent in the same time period, illustrating the kind of leverage that can be achieved through options. The unusual activity was highlighted at the time by Investitute co-founder Jon Najarian on CNBC’s “Halftime Report.”

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.

CZR was up 1.22 percent to close at $12.40 today. The casino operator has been rebounding in recent weeks as its turnaround plan takes hold.