Option bulls score big profits in $TSP

Option traders are scoring big profits in upside positions on Tusimple Holdings Inc (TSP).

On Aug. 9, Market Rebellion’s Unusual Activity Service found that 2,500 September $45 calls were bought for $1.30 to $1.40 above the existing open interest of 66 with shares at $34.20.

Those calls traded for as much as $9.00 today, over 6 times their purchase prices. The stock rose 46.9% at the same time, 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.

TSP was up by 18.75% to $46.36 at the close of today’s trade as the self-driving technology company traded back above its IPO price of $40.00.