Option bulls score in $BOIL

Bullish option positions opened this week in the ProShares Ultra Bloomberg Natural Gas (BOIL) are paying off this session.

On Feb. 22, Market Rebellion’s Unusual Activity Service detected the purchase of 17,487 Weekly $5.50 calls, expiring next Friday, for $0.40 to $0.45 with shares at $4.81. Open interest in the strike before the trade occurred was just 688 contracts, showing that this was a new position.

Those calls traded for as much as $0.90 today, 2 times their purchase prices. The stock rose 19.54% 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.

BOIL was last higher on the day by 4.73% to $5.73.

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