$CLOV call buyers double money

Option traders are doubling their money in Clover Health Investments (CLOV) as shares charge higher for a second session.

On Jun. 22, Market Rebellion’s Unusual Activity Service found that 7,000 Weekly $13 calls, expiring this Friday, were bought for $0.25 to $1.18 above open interest of 5,046 contracts with shares at $12.88.

Those calls sold for $2.05 this morning, about 2 times their purchase prices. The stock rose 12.42% in the same time period, 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.

CLOV was last higher on the session at $14.04, up 11.17%.