$BA call prices double

Option traders who opened bullish positions in Boeing (BA) just under two months ago were rewarded with profits today.

On Sep. 14, Market Rebellion’s Unusual Activity programs found that 3,000 November $160 calls were bought, at-the-money, in mostly four orders for $16.75 to $19.85 with shares at $160.09. Volume was well above the strike’s existing open interest of 793 contracts, indicating that this was fresh buying.

Those calls traded for as much as $33.84 so far today, 2 times their initial purchase price. The stock rose 20.87% in the same time period, showing how options can far outpace gains in 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.

BA was last up on session by 4.76% at $187.90. JPMorgan raised its price target for the shares to $190 from $155 this morning.