$KDP call prices rise 5-fold

Option traders are drinking up large profits in Keurig Dr Pepper (KDP) today.

On Jun. 2, Market Rebellion’s Unusual Option Activity Service found that 6,000 June $35 calls were bought for $0.39 to $0.43 as part of a bullish combo above the existing open interest of 2,240 contracts with shares at $34.49.

Those calls are have traded up to $2.45 today, more than 5.5 times their purchase prices. The stock rose 7.86% in the same time frame, illustrating how options can far outperform 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.

KDP is currently trading for $36.87, up 5.55% on the session.