$VZ call buyers dial up profits

Bullish option traders tripled their money in Verizon Communications today.

On March 26, Investitute’s market scanners found that 3,150 Weekly $48 calls expiring this Friday were purchased for $0.63 as part of a bullish spread with shares at $46.81. This was clearly a new position, as open interest in the strike was a mere 82 contracts before that session began.

Those calls traded for $2.11 today, nearly 3.5 times their purchase price. The stock rose 6.9% in the same time period, showing the kind of leverage that can be achieved 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.

VZ was up 0.87% to $50.10 today. The wireless carrier was upgraded by SunTrust and UBS this morning, on session after quarterly results topped estimates.