$GE calls spike sixfold in days

It took less than a week for bullish option traders to rack up exponential gains in General Electric.

On Tuesday, Investitute’s market scanners alerted the purchase of of 33,987 April $14.50 calls in one print for $0.09 as part of a bullish spread with shares at $13.72. This was clearly a new position, as volume was well above the strike’s open interest of 11,393 contracts.

Those calls traded for $0.56 today, more than 6 times their purchase price. The stock rose 9.7% 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.

GE was up 3.93% to $14.54 today. The industrial giant beat earnings estimates this morning amid speculation that the company may sell its rail business.