Bulls make money in a $SNAP

Upside option positions opened in Snap (SNAP) just last week are already paying exponential gains today.

On Apr. 17, Market Rebellion’s Unusual Activity Scanners found that 8,000 Weekly $13.50 calls expiring on Apr. 24 were bought as part of a bullish spread for $0.85 with shares at $12.96. This was clearly fresh buying, as open interest in the strike was only 1,017 contracts before that session began.

Those calls traded for as much as $3.60 today, more than 4 times their purchase price. The stock rose 31.72% in the same time frame, a large move but nowhere near that of its options on a relative basis.

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.

SNAP ended the session up 36.63% to $17.01 this afternoon. The social-media company beat revenue and user engagement expectations after the close yesterday.