$COOP bulls double money

Bullish option traders are seeing big profits on their upside positions in Mr Cooper Group Inc (COOP) today.

On Jul. 6, Market Rebellion’s Unusual Activity Service detected the purchase of 10,000 January $35 calls for $2.90 as part of a bullish spread with shares at $32.40. Open interest in the strike was just 337 contracts before that session began, showing that this was fresh buying.

Those calls have traded for $7.35 today, over 2 times their purchase price.  The stock rose 30.96% in the same time period, a fast 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.

COOP was last down by 0.14% in morning trade at $42.30.