$BILI bulls score at highs

It took less than a week for bullish option traders to rack up big gains in Bilibili (BILI).

On Dec. 24, Market Rebellion’s Unusual Activity Service found that 2,900 January $95 calls were bought for $1.50 to $1.55 with shares at $82.13. This was clearly fresh buying, as open interest in the strike was 2,709 contracts before the activity appeared.

Those calls traded for as much as $5.70 today, at least 3.5 times their purchase prices. The stock rose 15.79% at the same time, underscoring how quickly options can far outperform 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.

BILI was up 14.43% to close at $94.35 this afternoon. The Chinese online entertainment service provider set new highs this session.