Traders log another win in $GE

General Electric continued to rebound off multi-year lows today, yielding exponential returns on bullish option positions.

On Sept. 24, Investitute’s tracking systems detected the purchase of 50,000 March $14 calls for $0.26 and $0.27 with shares at $11.66. This was clearly a new position, as volume was far above the strike’s previous open interest of 14,716 contracts. Investitute co-founder Jon Najarian cited the unusual activity on CNBC’s “Halftime Report” today.

Those calls rose to $1.02 today, nearly 4 times their purchase prices. The stock rose 16.64% in the same time frame, showing how quickly options can far outpace gains in their underlying shares. It was the second winning trade in the name posted on Investitute in two consecutive sessions.

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.

GE was up 3.26% to $13.61 today. Barclays upgraded the industrial giant to “overweight” from “equal weight” this morning but left its price target unchanged at $16. The stock is up sharply since the company named a new CEO at the beginning of last week.