$GLW bulls see gains

Option traders collected large profits on upside positions in Corning (GLW) as shares rose today.

On Jul. 9, Market Rebellion’s Unusual Activity Service found that 2,500 July $26.50 calls expiring this Friday were bought for $0.54 as part of a bullish roll with shares at $26.30. This was clearly fresh buying, as open interest in the strike was 78 contracts before the session began.

Those calls have traded for up to $1.50 this morning, nearly 3 times their purchase price. The stock rose 6.35% in the same time period, showing how options can far outperform moves in their underlying shares on a relative basis.

Long calls lock in the price where a stock can be purchased, gaining with a rally and providing leverage to the underlying shares. The contracts can quickly lose value if the stock stalls or pulls back but also carry less risk than owning the shares themselves.

GLW was last up today 1.46% to $27.77. The glass-display maker announced an initiative this morning to speed 5g development, and is scheduled to report earnings on Jul. 28 before the opening bell.