Bulls keep cruising with $NCLH

Shares of Norwegian Cruise Line (NCLH) floated higher today, delivering a wave of profits to upside option positions opened last week.

On May 20, Market Rebellion’s Unusual Activity systems detected the purchase of 5,400 Weekly $13.50 calls expiring this Friday, May 29, for $0.35 to $0.70 with shares at $12.11. Volume was well above the strike’s previous open interest of just 519 contracts, indicating that this was a new position.

Today those calls today traded for $2.70, more than 3.5 times their purchase prices. The stock rose 33.44% in the same time, showing how options can far outperform their underlying shares.

Long calls lock in the price where a stock can be purchased, gaining with a rally and providing leverage to the underlying shares. The contracts can quickly lose value if the stock stalls or pulls back but also carry less risk than owning the shares themselves.

NCLH floated higher to $16.03 today, up 15.28% on the session. The cruise-line operator gapped higher this morning as the U.S. economy reopens in stages.