High octane call prices in $GM

Option traders are driving high octane profits once again on upside positions opened in General Motors (GM) last week.

On Mar. 10, Market Rebellion’s Unusual Activity tracking systems found that 6,000 Weekly $65 calls, expiring on Apr. 1, were bought for $0.59 to $0.63 with shares at $56.68. This was clearly fresh buying, as open interest in the strike was only 230 contracts before the activity appeared.

Those calls traded up to $1.38 this morning, well over double their purchase prices. The stock rose 9.58% in the same time frame, illustrating the kind of leverage that can be achieved with options.

This marks the second winning trade in the name posted on Market Rebellion in as many sessions.

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.

GM was up this session to a new high of $62.24 but pulled back by the close to end lower by 1.31% at $59.27.