$KWEB bulls score a winner

Bullish option traders have scored a quick winner in upside positions on the KraneShares CSI China Internet ETF (KWEB) today.

On Mar. 15, Market Rebellion’s Unusual Activity Service found that 23,000 April $25 calls were bought for $1.07 to $1.32 with shares at $21.98. This was clearly fresh buying, as open interest in the strike was just 2,983 contracts before the activity appeared.

Those calls traded up to $7.00 today, more than 5 times their purchase prices. The stock rose 42.63% in the same time period, 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.

KWEB is currently higher by 8.25% at $31.24 in afternoon trade.