$FTCH bulls score

Bullish option traders posted solid gains on upside positions opened in Farfetch (FTCH) ahead of its earnings report.

On Jul. 29, Market Rebellion’s Unusual Activity scanners identified the purchase of 3,500 August $28 calls for $1.17 to $1.34 with shares at $24.12. These were clearly new positions, as open interest in the strike was just 24 contracts before the activity appeared.

Those calls traded up to $4.00 today, 3 times their average purchase price. The stock rose 31.88% in the same time frame, illustrating the kind of leverage that can be achieved through 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.

FTCH ended the day at $28.56, 8.39% higher on the day after setting a new 52-Week high earlier in the session at $31.88. The online luxury fashion retail platform beat earnings expectations after the closing bell yesterday.