$XLF option bulls triple money

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

On May. 5, Market Rebellion’s UOA scanners showed that 12,000 Weekly $37 calls expiring this Friday were purchased for $0.35 to $0.40 with shares at $36.77. These were clearly new positions, as open interest in that contract before the trade occurred was just 2,240.

Those calls have traded up to $1.30 today, more than triple their purchase prices. The stock rose 4.03% 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 closed lower on the day at $37.75, down 0.079% after setting a new 52-Week high of $38.26 earlier in the session.