Bulls place a winning bet on $DKNG

It took just three sessions for option traders to score large gains on upside positions in DraftKings (DKNG).

On Jul. 14, Market Rebellion’s Unusual Activity Scanners showed that 5,500 July $30 calls expiring today were bought for $1.00 to $1.35 with shares of $29.76. This was clearly fresh buying, as open interest in the strike was only 2,842 contracts before the activity appeared.

Those calls traded for as much as $6.60 today, at least 4.5 times their purchase prices. The stock rose 23.86% in the same time frame, illustrating how quickly 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.

DKNG ended the session down 0.79% to $35.86 after trading as high as $36.88 earlier in the day. The sports betting company is estimated to report earnings on Aug. 14.