$HOG calls prices up 4-fold

It took only two sessions for bullish option traders to post exponential gains in Harley-Davidson (HOG).

On Dec. 10, Market Rebellion’s Unusual Activity Service found that 2,000 Weekly $37 calls expiring tomorrow were bought for $0.21 to $0.50 with shares at $37.03. This was clearly fresh buying, as open interest in the strike was only 122 contracts before that session began.

Those calls have traded for as much as $1.53 so far today, more than 4 times their average purchase price. The stock rose 4.13% in the same time frame, illustrating the kind of leverage that can be achieved with options.

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.

HOG is u 2.02% to $38.33 this morning. The iconic motorcycle company closed above its 50-day moving average yesterday.