$AAP bulls clock big gains

Bullish call positions opened last year in Advance Auto Parts (AAP) were clocking big gains today.

On Sep. 22, 2020, Market Rebellion’s Unusual Activity programs detected the the purchase 3,800 January, 2022, $170 calls for $17.10 to $18.70 with shares at $146.66. There was no previous open interest in the contract before the trade occurred, clearly showing that this was a new position.

Those calls ended the day marked at $47.10, more than double their purchase prices. The stock rose 46.56% in the same time frame, illustrating the kind of leverage that can be achieved with options.

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.

AAP traded higher this session to close at $214.95, up 2.22% on the day, setting a new all-time high this session of $215.09 as shares have advanced since its earnings report and raised guidance on Jun. 2.