Options News
$AAP bulls tune up gains
Bullish call positions opened last month in Advance Auto Parts (AAP) were clocking big gains today. On May 15, Market Rebellion’s Unusual Activity Service flagged the purchase of 2,600 June $125 calls for $6.80 to $7.30 with shares at $122.17. This was clearly fresh buying, as open interest in the strike was only 82 contracts before the […]
Bullish call positions opened last month in Advance Auto Parts (AAP) were clocking big gains today.
On May 15, Market Rebellion’s Unusual Activity Service flagged the purchase of 2,600 June $125 calls for $6.80 to $7.30 with shares at $122.17. This was clearly fresh buying, as open interest in the strike was only 82 contracts before the activity appeared.
Those calls traded for $18.30 this morning, more than 2.5 times their purchase prices. The stock rose 17.65% 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 to close at $142.66, up 3.49% on the day. In a regulatory filing after the close today it was disclosed by CEO Thomas Greco that he purchased 7,285 shares at $136.13 yesterday, Jun. 15.