$LCID call buyers score big profits

Option traders are riding profits on upside positions in Lucid Group Inc (LCID) today.

On Oct. 25, Market Rebellion’s Unusual Activity Service found that 24,500 Weekly $26 calls, expiring this Friday, were bought for $0.39 to $1.12 above the existing open interest of 8,579 contracts with shares at $26.36.

Those calls traded for as much as $13.45 today, or over 12 times their purchase price. The stock rose 49.32% in the same time frame, 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.

LCID closed at $35.48, up 31.31% on the session.