Bulls ride with $UBER

Option traders turned exponential profits on upside positions in Uber (UBER) today.

On Jan. 2, Market Rebellion’s Unusual Activity Service found that 2,300 January $33.50 calls were bought for $0.15 with shares at $30.39. Open interest in the strike was only 61 contracts before the trades occurred, indicating that this was new positioning.

Those calls have traded for as much as $1.65 today, 11 times their purchase prices. The stock rose 15.5% in the same time frame, illustrating the kind of leverage that can be achieved with options.

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.

UBER is nearly unchanged this afternoon, last at $34.79. CNBC reported this morning that Goldman Sachs (GS) sold its entire stake in the ride-sharing service during Q4.