$KNX call prices double intraday

It took just a few hours for bullish option traders to see substantial profits in Knight-Swift Transportation.

About 20 minutes after the opening bell today, Investitute’s market scanners flagged the purchase of 1,000 August $30 calls for $1.15 to $1.20 as part of a bullish roll with shares at $29.37. This was clearly a new position, as open interest in the strike was only 1 contract before the day began.

Those calls swelled to 8,300 in volume and traded as high as $2.65 by the end of today’s session, more than doubling in price. The stock rose 9.12% at the same time, underscoring how quickly options can 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.

KNX hit a 52-low of $29 early today but climbed throughout the session to close at $32.25, still down 9.94% but cutting its losses in half. The trucking company fell short of second-quarter earnings expectations this morning.