Patience pays for $GIS bulls

Upside option positions opened in General Mills last autumn are racking up large gains today.

Way back on Sept. 26, Investitute’s market scanners found that 15,000 18April $47.50 calls were bought for $1.46 as part of a bullish roll with shares at $44.06. Open interest in the strike was a mere 101 contracts before that session began, showing that this was a new position.

Those calls traded for as much as $2.85 this afternoon, about twice tis purchase price. The stock 13.78% in the same time period, illustrating the kind of leverage that can be achieved with 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.

GIS reached a 52-week high of $50.19 late this afternoon before closing at $50.05, up 3.62% on the session. The food company topped earnings estimates and raised its full-year outlook yesterday morning.