Bulls riding high on $HOG

Upside option trades opened in Harley-Davidson have doubled in just two sessions.

On March 25, Investitute’s market scanners identified the purchase of 3,850 Weekly $35 calls expiring on April 12 for $0.56 to $0.60 with shares at $33.91. This was clearly a new position, as open interest in the strike was a mere 7 contracts before that session began.

Those calls sold for as much as $1.23 today, twice their purchase prices. The stock rose 5.04% in the same time frame, showing how quickly options can far outpace gains in 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.

HOG jumped 2.07% to close at $35.55 today. The motorcycle manufacturer has outperformed the broader market this week after shares bounced off a support band.