$STZ bulls double their money

Short-term traders continued to book profits in Constellation Brands today.

On Oct. 3, Investitute’s proprietary programs found that 11,052 October $212.50 calls were bought for $5.60 as part of a bullish roll with shares at $212.72. This was clearly a new position, as open interest in the strike was a mere 79 contracts before the trade occurred.

Those calls sold for $14.50 today, more than 2.5 times their purchase price. The stock rose 6.22% in the same time frame, illustrating the kind of leverage that can be achieved quickly with options. It is the second winning trade in STZ posted on Investitute in three 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.

STZ was up 2.49% to $228.74. The alcoholic-beverage company beat quarterly estimates and lifted its guidance the morning after the October calls were purchased.