Call buyers are seeing gains in $VUZI

Bullish option traders are seeing big gains on upside positions in Vuzix (VUZI) today.

On Dec. 15, Market Rebellion’s Unusual Option Activity Service flagged the purchase of 3,000 December $5.50 calls, expiring today, for $0.10 to $0.30 with shares at $4.88. Volume was above the strike’s existing open interest of 152 contracts, indicating that this was fresh buying.

Those calls have traded for as much as $2.35 so far today, over 7.5 times their purchase prices. The stock rose 58.4% in the same time frame, underscoring 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.

VUZI was last up 11.41% at $7.42. The supplier of wearable display technology is setting new 52-Week highs this session.