Option traders are posting big profits today in bullish positions opened on Avantor Inc (AVTR).
On Jul. 28, Market Rebellion’s Unusual Activity Service found that 9,958 16October 13 calls were bought for $0.71 to $0.72 above the existing open interest of 110 contracts with shares at $12.18.
Those calls have traded for up to $2.15 so far today, a 198.61% return, while the stock rose 19.54% in the same time frame, showing how quickly options can far outpace gains in 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.
AVTR was last up 12.44% at $13.96 in early trade.
