$RF bulls rack up fast returns

It took less than a week for option traders to triple their money in Regions Financial

On March 27, Investitute’s market scanners identified the purchase of 8,650 18April $15 calls for $0.11 to $ 0.17 with shares at $14.05. This was clearly fresh buying, as open interest in the strike was only 276 contracts before the activity appeared.

Those calls traded for as much as $0.41 today, about 3 times their average purchase price. The stock rose 6.33% in the same time frame, 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.

RF was up 1.16% to $14.84 today. The Alabama-based lender has rallied along with other regional banks and financial names in the last week as interest rates have risen.