Traders make big gains with $ETSY at highs

Option traders doubled their money today on bullish positions in Etsy (ETSY), which is trading at new highs.

On Jun. 8, our Unusual Activity tracking systems showed that 2,000 September $85 calls were bought as part of a bullish spread for $6.31 and $6.32 above open interest of 705 contracts with shares at $75.91.

Those calls traded for as much as $42.00 today, more than 6.5 times their purchase prices. The stock rose 64.19% in the same time frame, 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.

ETSY was up 6.96% today to close at $126.62. The handmade and vintage items and craft e-commerce platform hit a new all-time-high today ahead of its earnings report scheduled for Aug. 5 after the closing bell.