$PYPL bulls double their money

Option traders turned significant profits today on upside positions in PayPal opened only two sessions earlier.

On Thursday, Investitute’s proprietary programs showed that 16,200 Weekly $74 calls expiring on May 25 were purchased for $1.17 to $1.60 with shares at $71.09. These were clearly new positions, as open interest in the strike was a mere 57 contracts before the activity appeared. After that unusual activity, Investitute’s co-founder Pete Najarian chose PYPL as his final trade that evening on CNBC’s “Fast Money” program.

Those calls traded for $2.85 this morning, just shy of 2.5 times their initial price. The stock rose 5.7% in the same time frame, illustrating the kind of leverage that can be achieved quickly 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.

PYPL was up 0.92% to $74.67. The electronic-payment company fell sharply after reports that Amazon would offer discounts to retailers that used its own payment service, but PayPal’s shares have since rebounded.