$FTCH bulls try on gains

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

On Oct. 14, Market Rebellion’s Unusual Activity scanners identified the purchase of 2,000 November $34 calls for $1.38 to $1.62 with shares at $27.97. These were clearly new positions, as open interest in the strike was just 21 contracts before the activity appeared.

Those calls have traded up to $16.00 today, at least 9.5 times their purchase prices. The stock rose 78.76% 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 was last higher on the day at $46.93, up 8.53% and setting a new high today. The online luxury fashion retail platform beat earnings expectations after the closing bell yesterday.