$PG call spike in one-day trade

Option traders turned quick gains today on bullish positions in Procter & Gamble opened just 24 hours earlier.

Yesterday morning, Investitute’s tracking systems showed that 1,800 Weekly $76 calls expiring this afternoon were purchased for $0.28 to $0.98 with shares at $76.67. These were clearly new positions, as volume was well above the strike’s open interest of 432 contracts. Investitute co-founder Pete Najarian cited the unusual activity at that time on CNBC’s “Halftime Report.”

Those calls traded for $1.54 today, more than 5 times their initial purchase price. The stock rose 1.12% at the same time, showing how quickly options can far outperform their underlying shares.

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.

PG was up 1.3% to $77.43 today. Shares popped after activist investor Nelson Peltz suggested yesterday that the consumer-products giant could be worth 30% to 40% more if it is broken up.