$XPO calls soar

Bullish option traders have made big profits in XPO Logistics (XPO) as its share price has rebounded to near its February levels.

On Aug. 11, Market Rebellion’s Unusual Activity Scanners showed that 2,000 September $87.50 calls were bought for $3.79 as part of a bullish spread above open interest of 108 contracts with shares of $84.71.

Those calls surged to $6.70 today, nearly double their purchase price. The stock rose 11.33% at the same time, showing how quickly options can far outperform their underlying shares 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.

XPO was last up 3.57% at $92.74. Credit Suisse raised its price target on the transportation-logistics company’s stock to $101 from $85 this morning.