$WW bulls double money

Option traders are turning large profits on upside positions in Weight Watchers (WW) today.

On Apr. 28, Market Rebellion’s UOA tracking systems detected the purchase of 4,500 October $30 calls for $3.50 as part of a complex bullish spread with shares at $27.66. Volume was well above the strike’s previous open interest of 257contracts, showing that this was fresh interest.

Those calls were last marked for $10.30 today, nearly 3 times their purchase price. The stock rose 38.27% in the same time frame, a large move but nowhere near that of its options on a relative basis.

Long calls lock in the price where investors can buy a stock, letting them position for a rally at limited cost with the potential for significant leverage. They carry less risk than owning shares because the most that can be lost is the price of the options no matter how far the stock might fall.

WW was last up 4.49% to $38.37 today. The weight-loss company met expectations in its earnings report on May 5, but said that Q1 end of period digital subscribers were up 16%.