Call prices lift higher in $UBER

Option traders turned big profits again on upside positions in Uber (UBER) today as call prices lift higher.

On Oct. 19, Market Rebellion’s Unusual Activity Service found that 8,000 Weekly $34.50 calls, expiring on Nov. 6, were bought for $1.95 as part of a bullish combo, selling 4,500 of the 06November 28 puts for $0.37 to $0.36 at the same time, with shares at $34.17. Open interest in the call strike was only 501 contracts before the trades occurred, indicating that this was new positioning.

Those calls traded for as much as $7.45 so far today, or almost 4 times their purchase prices. The stock rose 22.48% 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 $40.65, up 13.64% on the session. The ride-sharing service is trading higher this morning along with peer Lyft (LYFT) after Proposition 22 passed in California, keeping drivers classified as independent contractors.