$CWH call prices surge overnight

It took less than 24 hours for option traders to post substantial profits in Camping World.

Just yesterday, Investitute’s market scanners identified the purchase of 5,000 September $40 calls for $3.40 as part of a bullish spread with shares at $36.24. This was clearly a new position, as open interest in the strike was only 75 contracts before the activity appeared. Investitute co-founder Jon Najarian cited the unusual activity at that time on CNBC’s “Halftime Report.”

Those calls traded up to $5.80 today, gaining more than 70% overnight. The stock rose 15.3% at the same time, showing how quickly options can outpace moves in 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.

CWH jumped 10.28% to $40.37 today. The recreational-vehicle services company rallied after updating its fourth-quarter and full-year results after the market closed yesterday.