$BA calls up 5-fold overnight

Option traders are logging huge profits today on bullish positions opened in Boeing (BA) only one session earlier.

Just yesterday, Market Rebellion’s proprietary programs found that 11,000 Weekly $390 calls expiring this Friday were bought for $0.42 to $1.21 with shares at $378.97. This was clearly fresh buying, as open interest in hte strike was only 1,815 contracts before the activity appeared.

Those calls traded for as much as $4.70 today, more than 5.5 times their average purchase price. The stock rose 2.63% at the same time, showing how quickly 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 is up 1.83% to $388.63 in midday trading. Reuters reported today that the aerospace giant has begun settling its first Lion Air crash claims for $1.2M per family.