Bulls qualify for gains with $RKT

Rocket (RKT) has rallied sharply today, qualifying bullish option traders exponential gains on positions opened only yesterday.

On Mar. 1, Market Rebellion’s Unusual Activity Service found that 4,000 Weekly $23.50 calls expiring this Friday were bought for $0.79 to $1.20 with shares at $22.66. This was clearly fresh buying, as open interest in the strike was only 1,274 contracts before the activity appeared.

Those calls have traded up to $18.50 so far today, over 15 times their purchase prices. The stock rallied 84.91% in the same time period, 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.

RKT was last at $41.00 this afternoon, up 68.72% on the day. The personal finance and consumer service brands company’s shares are striking new multiyear highs this session.