Bulls keep riding with $UBER

Option traders turned big profits again on upside positions in Uber (UBER) today.

On Jan. 10, Market Rebellion’s Unusual Activity Service found that 3,400 Weekly $33 calls expiring on Feb. 7 were bought for $2.14 to $2.88 with shares at $34.10. Open interest in the strike was only 375 contracts before the trades occurred, indicating that this was new positioning.

Market Rebellion co-founder Jon Najarian cited the unusual activity at that time on CNBC’s “Halftime Report.”

Those calls traded for as much as $5.16 today, or about double their average purchase price. The stock rose 11.03% 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.

UBER was last at $37.67, up 0.16% on the session. The ride-sharing service announced yesterday morning that it had sold its food delivery business in India to Zomato in an all-stock transaction.