$WEN bulls snack on profits

Option traders have tripled their money in Wendy’s (WEN) after just one night.

Just yesterday, Investitute’s market scanners cited the purchase of 3750 August $19 calls from $0.15 to $0.26 with shares at $18.09. These were clearly new positions, as open interest in the strike was only 1,011 contracts before the trades occurred.

Those calls have gone for as much as $0.68 today, more than triple times their average purchase price. The stock rose 7.57% in the same time frame, underscoring how options can far outperform their underlying shares.

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.

WEN is currently higher by 6.08% at $19.20 today. The fast-food chain is up sharply after its quarterly earnings report this morning, where it beat on its earnings per share.