Options News
$LI call prices rise 15-fold
Bullish option traders are turning big profits in upside positions opened on Chinese electric-car maker Li Auto (LI). On Jun. 2, Market Rebellion’s Unusual Option Activity Service found that 5,400 July $34 calls were bought for $0.35 to $0.43 with shares at $25.88. This was clearly fresh buying, as open interest in the strike was only 18 […]
Bullish option traders are turning big profits in upside positions opened on Chinese electric-car maker Li Auto (LI).
On Jun. 2, Market Rebellion’s Unusual Option Activity Service found that 5,400 July $34 calls were bought for $0.35 to $0.43 with shares at $25.88. This was clearly fresh buying, as open interest in the strike was only 18 contracts before that session began.
Those calls have traded up to $6.50 so far today, more than 15 times their purchase prices. The stock rose 51.93% in the same time, underscoring how options can far outpace gains in their underlying shares on a relative basis.
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.
LI was last up 6.66% at $39.25.
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