$CARG option bulls quadruple money

A bullish option position opened in CarGurus (CARG) only one week ago closed today with exponential gains.

On Feb. 18, Market Rebellion’s Unusual Activity Service found that 2,000 March $36 calls were bought for $2.16 to $2.17 as part of a bullish roll above the existing open interest of 55 contracts with shares at $34.87.

Those calls sold for $9.78 this today, and closed the session marked at $10.20, each more than 4.5 times their purchase price. The stock rose 33.18% in the same time frame, showing how quickly options can far outpace 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.

CARG was up by 43.96% to $46.44 at the close today.