Traders win big with $ETSY at highs

Option traders doubled their money today on bullish positions in Etsy, which is trading at its highest level in more than two years.

On Oct. 26, Investitute’s proprietary programs cited the purchase of 6,000 December $17.50 calls as part of a bullish spread with shares at $15.99. This was clearly a new position, as open interest in the strike was only 240 contracts before the trade occurred.

Those calls sold for $1.30 today, more than doubling in price. The stock rose 17.2 percent in the same time period, underscoring the type of leverage that can be achieved through options.

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.

ETSY was up 3.02 percent today to close at $18.74. That was just off its session peak of $18.76, which was also a new 52-week high.