$LH call prices double

Option traders are scoring big profits on upside positions in Laboratory Corp. of America Holdings (LH) today.

On Jan. 31, Market Rebellion’s Unusual Activity Service found that 3,000 February $270 calls, expiring next Friday, were bought as part of a bullish spread for $8.50 above the previous open interest of just 13 contracts with shares at $267.06.

Those calls sold for as much as $20.33 today, over 2 times their purchase price. The stock rose 8.35% in the same time frame, underscoring how quickly 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.

LH was last up 0.78% at $283.84.