$XLF option bulls double money

Bullish traders doubled their money today in upside option trades on the SPDR S&P Financial Fund (XLF).

On Mar. 22, Market Rebellion’s Unusual Activity scanners showed that 12,500 April $34.50 calls expiring this Friday were purchased for $0.42 to $0.44 with shares at $33.62. These were clearly new positions, as there was no open interest in that contract before the trade occurred.

Those calls have traded up to $0.94 today, more than double their purchase prices. The stock rose 5.38% in the same time period, illustrating the kind of leverage that can be achieved through options.

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.

XLF was last higher on the day at $35.34, up 1.04%.