Calls fetch profits in $CHWY

Bulls are doubling their money in upside option positions on Chewy (CHWY) today.

On Mar. 15, Market Rebellion’s Unusual Activity Service found that 10,800 April $40 calls were bought for $2.26 to $2.64 with shares at $35.70. This was clearly fresh buying, as open interest in the strike was just 2,953 contracts before the activity appeared.

Those calls have traded for as much as $7.41 today, more than 2.5 times their purchase prices. The stock rose 27.48% in the same time period, an impressive move but nowhere near the gains in its options.

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.

CHWY in afternoon trading is currently up by 11.46% to $46.01.