$TPR call buyers turn quick gains

It took just one week for bullish option traders to quadruple their money in Tapestry.

On Aug. 9, Investitute’s market scanners identified the purchase of 4,400 August $48.50 calls for $1.20 to $1.50 with shares at $47.29. This was clearly fresh buying, as volume was well above the strike’s open interest of 1,808 contracts.

Those calls sold for $5.60, more than 4 times their initial purchase price. The stock rose 14.38% in the same time frame, 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.

TPR surged 12.01% to $53.16 today. The accessories retailer, formerly known as Coach, beat earnings and revenue estimates this morning.