$TGT bulls double their money

Option traders rang up significant profits in Target today.

On Aug. 2, Investitute’s tracking systems detected the purchase of 2,034 September $77.50 calls for $3.85 as part of a bullish spread with shares at $79.34. This was clearly a new position, as open interest in the strike was only 133 contracts before the trade occurred.

Those calls ended today’s session marked at $10.15, more than 2.5 times their purchase price. The stock rose 13.07% in the same time frame, illustrating the kind of leverage that can be achieved with options. It was the third winning TGT trade posted in Investitute in the last month.

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.

TGT was up 0.46% to $87.68 today. On Aug. 22 the retail chain reported its best sales numbers in more than 13 years this morning.