The gains fit for $FL bulls

Bullish option traders doubled their money in Foot Locker (FL) today.

On Feb. 4, Market Rebellion’s Unusual Activity Service detected the purchase of 3,150 February $47.50 calls as part of a bullish roll for $1.75 with shares at $47.47. This was clearly fresh buying, as open interest in the strike was just 2,636 contracts before the activity appeared.

Those calls traded for as much as $4.12 during today’s session, more than double their purchase price. The stock rose 7.96% in the same time period, illustrating how quickly options can far outperform moves in their underlying shares.

Long calls lock in the price where investors can buy a stock, letting them position for a rally at limited cost with the potential for significant leverage. They carry less risk than owning shares because the most that can be lost is the price of the options no matter how far the stock might fall.

FL was up 2.9% to $50.40 today, making a new 52-Week high this session. The shoe retailer was upgraded to a Buy from Neutral at Citi, Friday morning, also seeing its price target raised by the firm to $60 from $47.