$NKLA calls charge up overnight

Nikola (NKLA) call prices are charging toward big gains for bullish option traders today.

Just yesterday on Apr. 21, Market Rebellion’s Unusual Activity Service flagged the purchase of 3,000 Weekly $11 calls, expiring next Friday, for $0.25 to $0.33 with shares at $9.95. This was clearly fresh buying, as open interest in the strike was only 560 contracts before the activity appeared.

Those calls traded for as much as $2.13 today, at least 5 times their purchase prices. The stock rose 27.24% in the same time frame, a huge move but nothing like that of its options.

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.

NKLA ended the day up by 14.38% at $11.77 after trading as high as $12.79 earlier in the session. The battery-electric and hydrogen fuel-cell electric vehicle maker announced this morning that it and TravelCenters (TA) have agreed to collaborate on the installation of hydrogen fueling stations at two of the latter’s existing sites.