$BBAI call buyers rewarded

Bullish option traders are being rewarded with big gains this session in BigBear.ai Holdings Inc (BBAI).

On Mar. 31, Market Rebellion’s Unusual Option Activity Service identified the purchase of 4,800 Weekly $2.50 calls, expiring Apr. 6, for $0.15 to $0.20 with shares at $2.14. The volume was well above the open interest of 81 contracts at the time, indicating that this was a new position.

Those calls have traded for as much as $0.71 today, a 255% return, while the stock rose 45.79% at the same time, showing how quickly 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.

BBAI was up by 28.28% to $3.13 at the close of trade.