$KRE option bulls bank big profits

Bullish option traders are banking profits in upside positions on the SPDR S&P Regional Banking ETF (KRE).

On Oct. 22, Market Rebellion’s Unusual Activity Service found that 4,000 Weekly $63 calls, expiring Nov. 29, were bought for $0.87 above the existing open interest of 3 contracts with shares at $58.16.

Those calls have sold for as much as $4.26 today, a 389.66% return, while the stock rose 14.1% in the same time period, underscoring 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.

KRE was last up 12.49% at $66.40.