Bulls find fast profits in $CRWD

Crowdstrike (CRWD) is trading higher this morning, handing fast profits to bullish option positions opened yesterday.

Yesterday afternoon on Sep. 30, Market Rebellion’s Unusual Activity Service found that 3,000 Weekly $140 calls, expiring this Friday, Oct. 2, were bought $0.85  to $1.60 with shares at $137.74. This was clearly a new position, as open interest in the strike before that session began was only 1,419 contracts.

Those calls have traded for up to $5.56 so far today, at least 3 times their purchase prices. The stock rose 4.33% 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.

CRWD was last up 4.74% to $143.83. The company announced yesterday that following it acquisition of Preeempt Security, Q3 and FY21 guidance would remain unchanged.