$OPEN option bulls close in on gains

Opendoor Technologies Inc (OPEN) is setting a new 6-Month high this session, and option bulls are closing in on big gains.

On Oct. 7, Market Rebellion’s Unusual Activity Service found that 7,500 October $20.50 calls, expiring this Friday, were bought for $0.60 to $0.65 as part of a bullish roll above the existing open interest of 360 contracts with shares at $20.18.

Those calls traded up to $3.10 this session, more than 4.5 times their purchase prices. The stock rose 16.4% in the same time frame, showing how quickly options can far outpace 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.

OPEN was up 1.03% to close at $23.49 today.