$RDFN bulls turn quick gains

It took just one week for option traders to double their money on upside positions in Redfin (RDFN).

On Nov. 5, Market Rebellion’s proprietary programs flagged the purchase of 2,100 November $19 calls for $0.95 to $1.15 with shares at $18.82. Volume was well above the strike’s previous open interest of 1,331 contracts, indicating that this was new positioning.

Those calls traded for as much as $1.97 today, twice their initial purchase price. The stock rose 10.79% 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.

RDFN climbed to $21.18 early in the session before pulling back to $20.66, off 0.51% this morning. The real-estate company beat earnings and sales estimates on Nov. 6, the day after the calls were bought.