Traders score big gains in $YRCW

Bullish option traders more than doubled their money in YRC Worldwide today, thanks to strong quarterly results.

On April 26, Investitute’s tracking systems detected the purchase of 10,000 May $8 calls in one print for $0.92 with shares at $8.35. This was clearly a new position, as open interest in the strike was only 137 contracts before the activity appeared.

Those calls traded as high as $2.50 this morning, more than 2.5 times their purchase price. The stock rallied 25.7% in the same time period, a large move but still far below that of the options on a relative basis.

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.

YRCW spiked higher by 18.36% to $9.99 today. The transportation-services company topped earnings estimates before the market opened this morning.