$TLT calls double between sessions

Worries over Italian politics and their effect on the European Union paid large profits for option traders with upside positions in the iShares 20+ Year Treasury Fund today.

On Friday, Investitute’s tracking systems found that 5,500 Weekly $118 calls expiring on June 1 were purchased for $1.60. Volume was above open interest of 610 contracts at the time, showing that this was fresh buying, with shares at $119.57.

Those calls traded for $4.41 today, more than twice their initial purchase price. The stock rose 2.4% at the same time, showing how quickly options can far outperform 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.

TLT jumped 2.17% to $119.62 today. The exchange-traded fund, which tracks U.S. Treasuries with maturities greater than 20 years, rose as investors rushed to take a “risk-off” stance with Eurozone breakup fears looming. Equities and bonds usually trade inversely to each other.