Traders make bank on Citigroup

Bullish option traders are reaping profits as Citigroup trades at multi-year highs.

On April 13, Investitute’s market scanners found that 7,000 Weekly $61.50 calls expiring on May 26 were purchased for $0.59 with shares trading at $58.13. Open interest in the strike was a mere 33 contracts before that session began, showing that this was fresh buying.

Today those calls went for $1.35, more than doubling in value. The stock gained 7.5 percent in that same time frame, illustrating 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.

C rose 1.74 percent to close at $62.49 today after peaking at $62.58 earlier in the session, its highest intraday price since the financial crisis of 2008.

For more information on Unusual Option Activity, visit this page.