$URI bulls double their money

Option traders posted large gains in United Rentals today, thanks to strong quarterly results.

On Dec. 10, Investitute’s proprietary programs flagged the purchase of 2,000 March $120 calls for $4.55 as part of a bullish spread with shares at $100.10. This was clearly a new position, volume was well above the strike’s open interest of 1,157 contracts before that session began.

Those calls traded for as much as $10.60 today, nearly 2.5 times their purchase price. The stock rallied 24.56% in the same time period, a large move but nowhere near that of its 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.

URI jumped 6.29% to $123.32 today. The equipment-rental company topped earnings and revenue estimates after the market closed yesterday.