$OSTK bulls ring register again

Option traders are cashing in once more on upside positions in Overstock (OSTK) today.

On July 8, Investitute’s tracking systems detected the purchase of 2,100 July $16 calls for $0.70 to $1.40 with shares at $16.15. This was clearly fresh buying, as volume was well above the strike’s previous open interest of 728 contracts.

Those calls sold for as much as $2.45 today, more than twice their average purchase price. The stock rose 14.49% in the same time frame, underscoring how options can far outpace gains in their underlying shares.

This is the fourth winning trade in the name posted on Investitute in the last week.

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.

OSTK is up 5.57% to $18.18 in early afternoon trading. Shares are up sharply since the online retailer announced in late June that its subsidiary tZERO had launched a digital wallet and a mobile app for cryptocurrencies. The stock jumped again last week when Overstock announced that it has partnered with Atari Movie Producers “to tokenize the first major theatrical motion picture.”