$BA calls make a quick ascent

Option traders who opened bullish positions in Boeing (BA) this morning were racking up large gains before the closing bell.

Just over 30 minutes after the opening bell, Market Rebellion’s Unusual Activity programs found that 9,000 Weekly $130 calls expiring this Friday, May 22, were bought for $2.49 to $4.10 with shares at $126.13. Volume was well above the strike’s existing open interest of 2,578 contracts, indicating that this was fresh buying.

Those calls traded for $8.40 today, more than 2 times their purchase prices. The stock rose 7.72% in the same time period, showing how options can far outpace gains in 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.

BA closed higher on the session by 12.87% at $135.44. The aircraft manufacturer rose sharply along with other Industrials today.