$TGT calls double overnight

Bullish option traders are already collecting profits on positions opened in Target (TGT) only one session earlier.

Just yesterday, Market Rebellion’s activity scanners found that 4,400 Weekly $110 calls expiring this Friday were bought for $0.33 to $0.54 with shares at $107.96. This was clearly fresh buying, as open interest in the strike was only 694 contracts before that session began.

Those calls have traded for as much as $0.87 today, twice their average purchase price. The stock rose 1.18% at the same time, 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.

TGT is up 1.18% to $109.22 this afternoon. The retailer gapped higher on strong quarterly results Aug. 21 and has held those gains despite the broader market’s volatility.