Cleveland-Cliffs Inc.  (CLF) - Get Cleveland-Cliffs Inc Report  shares spiked to 52-week highs on strong quarterly results reported Friday, July 20, handing substantial gains to upside option traders.

On June 14, Investitute's proprietary programs flagged the purchase of 10,900 July $7 calls, expiring on July 20, for $1.83 to $1.88 with shares at $8.81. Volume was well above the strike's open interest of 4,141 contracts, showing that this was fresh buying.

These call buyers may have wished to make a bullish statement that the stock of CLF was undervalued, and wanted to participate in the base material producer's earnings report with a known risk amount, against a volatile backdrop for the industry with trade-tensions on the rise.

Those July $7 calls traded up to $3.25 Friday, nearly twice their initial purchase price. The stock rose 16.76% in the same period, illustrating the kind of leverage that can be achieved with options. Investitute co-founder Jon Najarian updated the trade on CNBC's "Halftime Report."

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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.

CLF surged 12.67% on Friday to close at $9.96 after hitting an intraday high of $10.37, its best price in a year. The iron-ore producer, which has seen several bullish option trades in recent months, topped earnings and revenue expectations that morning.