Home Depot wowed Wall Street on Tuesday, and now at least one trader stands to make a lot of money after betting on the stock's direction.
The home improvement mega-retailer beat analysts' expectations on its revenues, profits and same-store sales. It also upped its full-year earnings guidance. Home Depot's stock soared during Tuesday's pre-market trading, trading more than $2 above its previous closing price of $114.33.
The options market was particularly bullish on the stock on Monday. Bullish bets on Home Depot outnumbered bearish ones by a ratio of 4-to-1. And one trade now seems quite prescient.
Specifically, 6,500 contracts of the weekly May 116-strike calls were traded for a price of about 85 cents each. Since each contract controls 100 shares, more than $550,000 was wagered that Home Depot shares would close above $116.85, or 2 percent higher than Monday's close. A call is a bullish bet allowing purchasers to buy a stock at a set price within a specific time frame.
According to options expert Mike Khouw, the choice of the 116-strike calls may not have been just a coincidence. "This stock has typically moved about 2.8 percent on earnings," he explained. "That's how much the stock would need to go higher for these calls to be profitable."
Read More Home Depot nails it 1Q as housing rebound emerges