Traders clean up with $CLX calls

Last-minute bullish option positions turned exponential gains in Clorox today.

Just before yesterday’s closing bell, Investitute’s market scanners found that 2,000 Weekly $136 calls expiring tomorrow were bought for $1.82 and $1.83 as part of a bullish spread with shares at $133.92. This was clearly a new position, as open interest in the strike was a mere 92 contracts before the activity appeared.

Those calls traded for as much as $6.95 this afternoon, nearly 4 times their purchase prices in less than 24 hours. The stock rose 6.64% at the same time, illustrating 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.

CLX jumped 6.17% to $142.44 today. The bleach maker surpassed second-quarter projections on the top and bottom lines before the market opened this morning.