Bulls $SNAP big profits

Bullish option traders are cashing in exponential profits on Snap (SNAP) calls today.

On Sep. 23, Market Rebellion’s Unusual Activity Scanners found that 9,000 November $27 calls were bought for $1.99 to $2.23 as part of a bullish roll with shares at $25.32. This was clearly fresh buying, as open interest in the strike was only 321 contracts before that session began.

Those calls have traded for as much as $11.80 so far today, more than 5 times their purchase prices. The stock rose 52.96% 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 is making fresh highs this session, last up 36.53% to $38.83. The social media company topped estimates on its top and bottom lines during its earnings announcement yesterday after the closing bell.