$VMC calls quadruple overnight

Vulcan Materials spiked higher on strong quarterly results today, returning huge profits on bullish option positions opened only one session earlier.

Just yesterday, Investitute’s tracking systems detected the purchase of 5,000 November $95 calls in one print for $1.50 with shares at $87.77. This was clearly a new position, as open interest in the strike was a mere 101 contracts before the trade occurred.

Those calls sold for $6.10 just before today’s closing bell. The stock rose 12.85% at the same time, showing how quickly options can far outperform 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.

VMC soared 17.49% to $98.93 today. The asphalt and concrete producer topped earnings and revenue estimates before the market opened this morning.