$ASH call prices rocket fivefold

Ashland Global is up sharply this month, yielding exponential gains on upside option positions.

On May 1, Investitute’s tracking systems detected the purchase of 2,170 July $80 calls in one print for $0.30 with shares at $64.96. This was clearly a new position as volume was more than double the strike’s open interest of 1,022 contracts.

Those calls traded for $1.55 today, more than 5 times their purchase price. The stock rose 15.9% in the same time frame, underscoring how options can far outperform their underlying shares.

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.

ASH was up 1.03% to $75.47 today. The chemical company has advanced steadily since reporting quarterly results at the end of last month.