$STZ bulls toast strong numbers

Option traders turned large profits in Constellation Brands today.

On March 1, Investitute’s tracking systems detected the purchase of 3,000 July $220 calls for $12.30 to $12.80 with shares at $215.19. This followed buying in the same strike on Feb. 27.

Those calls traded for $19.50 today more than 1.5 times their original purchase price. The stock rose 0.7% 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.

STZ jumped 3.37% to $227.92 today. The alcoholic-beverage company exceeded earnings and sales expectations this morning.