$PLNT bulls double money

Option traders have posted big gains as Planet Fitness (PLNT) has rallied in recent days.

On Aug. 21, Our market scanners identified the purchase of 1,100 October $70 calls for $2.35 to $2.45 above open interest of 871 contracts with shares at $67.77. Co-founder Jon Najarian cited the unusual activity at that time on CNBC’s “Halftime Report.”

Those calls traded for $4.60 today, about twice their initial purchase price. The stock rose 6.17% at the same time, illustrating the kind of leverage that can be achieved with options.

Long calls lock in the price where a stock can be purchased, gaining with a rally and providing leverage to the underlying shares. The contracts can quickly lose value if the stock stalls or pulls back but also carry less risk than owning the shares themselves.

PLNT is up 1.39% to $79.92 in midday trading. The fitness-center chain pulled back despite beating quarterly estimates on Aug. 6 but have been rebounding this week. Roth Capital raised its price target to $86 from $80 after the company’s earnings report.