$SEE call buyers rake in profits

Bullish option traders are cashing in exponential gains today in Sealed Air (SEE).

On May 23, Investitute’s proprietary programs flagged the purchase of 5,100 June $41 calls for $1 to $1.35 with shares at $41.38. This was clearly a new position, as open interest in the strike was a mere 8 contracts before the trades occurred.

Those calls sold for as much as $3.91 today, more than 3 times their average purchase price. The stock rose 8.53% 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.

SEE reached a session high of $45.26 this morning but have pulled back to trade at $44.56 this afternoon, off 0.54% on the day. The food safety and packaging company has rebounded sharply this month.