$WEN calls turn quick profits

It took just one session for bullish option traders to double their money in Wendy’s (WEN).

On Oct. 11, our activity scanners identified the purchase of 5,400 October $21 calls for $0.19 to $0.25 above open interest of 3,658 contracts with shares at $20.56. Market Rebellion co-founder Pete Najarian cited the unusual activity that day on CNBC’s “Halftime Report.”

Those calls traded for as much as $0.39 today, more than twice their initial purchase price. The stock rose 2.43% at the same time, illustrating 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.

WEN is up 0.34% to $20.85 in morning trading. On Friday the fast-food chain raised its dividend and announced same-store sales that surpassed expectations.