$BA call prices double

Option traders who opened bullish positions in Boeing (BA) yesterday were rewarded with profits today.

Just over 30 minutes after the opening bell yesterday, Market Rebellion’s Unusual Activity programs found that 4,500 Weekly $135 calls expiring this Friday, May 22, were bought for $1.20 to $2.05 with shares at $126.13. Volume was well above the strike’s existing open interest of 1,727 contracts, indicating that this was fresh buying.

Those calls traded for $5.36 this morning, at least 2.5 times their purchase prices. The stock rose 8.43% in the same time period, showing how options can far outpace gains in their underlying shares.

It is the second winning trade in the name posted on Market Rebellion in as many sessions.

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.

BA closed lower on the session by 3.73% at $130.44 after trading as high as $137.04 at the open. The aircraft manufacturer continued its climb higher with other Industrials today before pulling back with the rest of the market.