$WMT bulls ring up quick profits

Option traders are doubling their money today on upside positions opened in Walmart (WMT) at the end of last week.

On Apr. 3, Market Rebellion’s proprietary Unusual Activiy programs found that 2,900 Weekly $120 calls expiring this Thursday, Apr. 9, were bought for $1.36 to $2.04 with shares at $118.40. This was clearly fresh buying, as open interest in the strike was only 621 contracts before that session began.

Those calls traded for as much as $4.80 so far today, more than twice their purchase prices. The stock rose 4.98% in the same time frame, 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.

WMT is up 3.93% to $124.17 this afternoon. The retail giant announced Friday evening that sales in U.S. stores were up 20% year-over-year over the last four weeks.