Bulls make profits in $DELL

Option traders have made huge profits on bullish positions in Dell Technologies (DELL).

On Jun. 23, Market Rebellion’s Unusual Activity programs flagged the purchase of 2,550 October $55 calls for $2.20 to $2.37 as part of a bullish roll with shares at $48.69. This was fresh buying as the volume appeared to be adding to an existing trade as part of the open interest.

Those calls traded for as much as $12.62 today, more than 5 times their purchase prices. The stock rose 38.06% in the same time frame, showing how 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.

DELL was up 6.05% to $66.21 at the close after beating on its top and bottom lines during its quarterly report yesterday after the close.