$KWEB bulls score another winner

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

On Jan. 2, Market Rebellion’s tracking systems detected the purchase of 3,200 January $51.74 calls for $0.45 to $0.55 with shares at $50.38. These were clearly new positions as open interest in the strike was a mere 280 contracts before the activity appeared.

Those calls have traded for as much as $1.57 so far today, more than 2 times their purchase prices. The stock rose 5.3% in the same time frame, illustrating the kind of leverage that can be achieved with options.

It is the second winning trade in the ETF to be posted on Market Rebellion this week.

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.

KWEB is currently higher by 1.4% on the day at $52.96. The exchange-traded fund, which tracks a basket of Chinese internet equities, made a fresh 52-Week high earlier of $53.06, as U.S. President Trump mentioned that U.S. and Chinese negotiators will get to work on a Phase 2 trade deal soon.