$WMT bulls shop for quick gains

Option traders are making big profits today on upside positions opened in Walmart (WMT) just last week.

On Mar. 25, Market Rebellion’s proprietary Unusual Activity programs found that 5,400 Weekly $136 calls expiring this Thursday, Apr. 1, were bought for $0.46 to $0.71 with shares at $132.87. This was clearly fresh buying, as open interest in the strike was only 3,540 contracts before that session began.

Those calls traded for as much as $1.60 today, at least double their purchase prices. The stock rose 3.1% 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 was up 1.14% to $136.67 at the close this afternoon.