UPS call buyers double their money

United Parcel Service yielded big returns on upside option positions that expired today.

On June 12, Investitute’s tracking systems showed that 9,190 Weekly $110 calls expiring this afternoon were purchased mostly for $0.64 as part of a bullish roll with shares at $108.43. This was clearly a new position, as open interest in the strike was a mere 95 contracts before the trade occurred.

Today those calls sold for $1.74, more than doubling in value. The stock rose just 2.4 percent in the same period, highlighting 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.

UPS was up 1.1 percent to close at $110.27 today. The parcel-delivery service rebounded yesterday after rival FedEx beat quarterly estimates on the top and bottom lines earlier in the week.