$CVNA call prices rocket 8-fold

Bullish option traders have racked up astronomic profits in Carvana.

On July 23, Investitute’s proprietary programs flagged the purchase of 2,000 September $50 calls for $2.37 to $2.58 as part of a bullish spread with shares at $43.28. There was no open interest in the strike before the activity appeared, showing that this was fresh buying.

Those calls were marked at $20.85 this afternoon, more than 8 times their purchase prices. The stock soared 63.63% in the same time period, a huge increase but even that move paled in comparison to that of 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.

CVNA reached an all-time high of $71.24 late today before closing at $70.82, still up 3.72% on the session. The online car marketplace rallied sharply after Moody’s issued a bullish note on the company.