$LC call buyers take big profits

Bullish option traders have tripled their money in LendingClub (LC).

On Dec. 31, Market Rebellion’s Unusual Activity Scanners showed that 4,400 January $9 calls were bought for $0.45 to $0.70 above open interest of 474 contracts with shares at $9.04.

Those calls sold for $2.60 this afternoon, at least 3.5 times their purchase prices. The stock rallied 27.65% 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.

LC jumped 14.17% today to close at $11.52. The online loan marketplace was up sharply along with other financial names ahead of key earnings reports slated for later this month.