$UTX bulls ring the register

Option traders tripled their money on bullish positions in United Technologies today.

On Jan. 8, Investitute’s market scanners identified the purchase of 2,750 February $110 calls for $3.35 as part of a bullish spread with shares at $108.52. This was clearly a new position, as open interest in the strike was only 497 contracts before that session began.

Those calls sold for as much as $9.50 this morning, nearly 3 times their purchase price. The stock rose 9.24% in the same time frame, showing how quickly options can far outpace gains in 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.

UTX jumped 5.38% to $117.04 today. The aerospace and industrial manufacturer blew past earnings expectations and gave bullish guidance this morning.