Option traders are scoring big profits on upside positions opened in Apple (AAPL).
On Nov. 3, Market Rebellion’s Unusual Option Activity Service found that 9,584 Weekly $177.50 calls, expiring today, Nov. 10, were bought for $1.16 with shares at $175.84. This was clearly fresh buying, as open interest in the contract was just 6,201 before the activity appeared.
Those calls have traded for as much as $8.35 today, a 619.83% return, while the stock rose 5.66% at the same time, showing how 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.
AAPL was last up on the day by 1.93% at $185.68.
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