$MTTR option bulls score major profits

Option traders are scoring major profits on upside positions in Matterport Inc (MTTR) today.

On Sep. 9, Market Rebellion’s UOA Service identified the purchase of 12,000 September $20 calls for $0.11 to $0.30 with shares at $16.75. This was clearly a new position, as open interest in the strike was only 3,514 contracts before the trade occurred.

Those calls changed hands for $2.85 this session, at least 9.5 times their purchase prices. The stock rose 36.36% 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.

MTTR finished the session higher by by 5.5% at $22.25.