$BTCM call buyers mine fast gains intraday

Just over a half an hour into this session, Sep. 2, Market Rebellion’s Unusual Activity programs detected the the purchase of 5,700 September $12.50 calls for $0.40 to $0.60 with shares at $9.47. Open interest in the contract before the trade occurred was just 4,086, showing that this was a new position.

Those calls have traded for up to $2.90 already today, at least 4.5 times their purchase prices. The stock rose by as much as 43.93% in the same time frame, 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.

BTCM was last up 28.56% at $12.02 after trading as high as $14.09 earlier in the session.