$HOG calls prices rise 7-fold

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

On Nov. 30, Market Rebellion’s Unusual Activity Service found that 3,000 December $37 calls, expiring this Friday, were bought for $0.90 as part of a bullish spread above the existing open interest of 315 contracts with shares at $36.05.

Those calls have traded for as much as $6.60 today, more than 7 times their average purchase price. The stock rose 19.78% 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 up 4.81% to $38.58 in afternoon trade.