$DAL call prices rise 4-fold

It took only two sessions for option traders to turn exponential gains on upside positions in Delta Air Lines (DAL).

On June 28, Investitute’s market scanners found that 3,800 Weekly $59 calls expiring this Friday were bought for $0.16 and $0.17 with shares at $57.01. This was clearly fresh buying, as volume was more than double the strike’s previous open interest of 1,587 contracts.

Those calls traded up to $0.65 today, about 4 times their purchase prices. The stock rose 3.81% in the same time frame, showing how quickly options can far outperform 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.

DAL is up 1.28% to $58.52 this afternoon. The airline raised its earnings and revenue outlook today ahead of full quarterly results scheduled for July 11 before the market opens.