Option bulls score in $PYPL at highs

Option traders have scored on upside positions opened in PayPal (PYPL) just last week.

On Dec. 16, our Unusual Activity tracking systems showed that 5,000 Weekly $240 calls expiring this Thursday were bought for $1.15 to $1.66 above open interest of 446 contracts with shares at $227.35.

Those calls traded for as much as $4.50 today, at least 2.5 times their purchase prices. The stock rose 7.16% in the same time frame, illustrating the kind of leverage that can be achieved with options.

This marks the second winning trade in the name to be posted by Market Rebellion this month.

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.

PYPL was up 2.43% to close at $243.49 today. The online payments system’s stock price target was raised to $275 from $234 at Deutsche Bank this morning.