Bulls double money in $PYPL

PayPal continued to yield large returns on upside option positions today.

On Oct. 17, the day before the company’s quarterly results, Investitute’s tracking systems detected the purchase of 7,800 November $85 calls for $1.49 to $1.89 with shares at $80.64. These were clearly new positions, as volume was well above the strike’s open interest of 2,305 contracts before the activity appeared. Investitute co-founder Pete Najarian cited the unusual activity at that time on CNBC’s “Halftime Report.”

Those calls traded up to $3.43 today, double their average purchase price. The stock rose 6.82% in the same time frame, illustrating the kind of leverage that can be achieved quickly with options. It was the second winning trade in PYPL posted on Investitute in as many sessions.

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.

PYPL was up 0.77% to $85.43 today. The digital-payment service beat estimates on the top and bottom lines after the market closed on Oct. 18.