$CCIV bulls triple money

Churchill Capital (CCIV) has been running higher this week, delivering big gains on upside option positions opened last week.

On May 25, Market Rebellion’s Unusual Activity Service found that 2,600 Weekly $20.50 calls, expiring tomorrow, Jun. 4, were bought for $0.46 to $1.10 above open interest of just 463 contracts with shares at $19.32.

Those calls have traded up to $3.90 so far this session, more than 3.5 times their purchase prices. The stock rose 26.19% at the same time, showing how options can quickly outperform their underlying shares by a wide margin.

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.

CCIV was last up 0.17% at $23.60 in midday trade.