$FNKO calls bid higher

Option traders who opened bullish positions in Funko (FNKO) just over a week ago were racking up large gains today.

On Mar. 23, Our market scanners showed that 2,200 April $17.50 calls were bought for $1.15 to $3.10 with shares at $17.98. This was clearly a new position, as open interest in the strike was only 357 contracts before the trade occurred.

Those calls traded this session up to $7.42, over 2 times their purchase prices. The stock rose 37.6% 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.

FNKO ended today’s session up 6.50% to $20.96 after announcing it had acquired a majority ownership stake in TokenWave, a mobile app showcasing NFT holdings.