$DKNG bulls score a slam dunk

It took less than one week for option traders to score a slam dunk with gains on upside positions in DraftKings (DKNG).

On Aug. 28, Market Rebellion’s Unusual Activity Scanners showed that 5,000 September $40 calls were bought for $2.15 as part of a bullish spread with shares of $37.34.

Those calls traded for as much as $4.12 today, nearly double their purchase price. The stock rose 9.04% in the same time frame, illustrating 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.

DKNG ended the session up 8.04% to $39.90 after trading as high as $41.29 earlier in the day. The sports betting company announced today that Michael Jordan joined as a special advisor to the board.