$TWTR calls turn quick gains

It took just three sessions for option traders to double their money in Twitter.

On Jan. 30, Investitute’s market scanners identified the purchase of 5,000 February $35 calls for $0.89 as part of a spread with shares at $31.66. Investitute co-founder Pete Najarian cited bullish activity in the name on CNBC’s “Halftime Report” two sessions earlier.

Those calls traded up to $1.78 today, twice their purchase price. The stock rose 7.93% in the same time frame, showing the kind of leverage that can be achieved quickly with options.

Long calls lock in the price where a stock can be purchased, gaining with a rally and providing leverage to the underlying shares. The contracts can quickly lose value if the stock stalls or pulls back but also carry less risk than owning the shares themselves.

TWTR was up 2.26% to $33.94 today. The social-media stock gapped higher along with Facebook (FB) after that company reported strong quarterly results on Jan. 30.