$BITO call prices rise 6-fold

Bullish option traders have made big gains in upside positions on the ProShares Bitcoin Strategy ETF (BITO).

On Oct. 24Market Rebellion’s Unusual Option Activity Service found that 12,500 Weekly $12.50 calls, expiring this Friday, Oct. 28, were bought for $0.08 to $0.10 with shares at $11.93. This was clearly fresh buying, as the open interest in the contract before the activity appeared was just 4,346.

Those calls have sold for as much as $0.60 today, at least 6 times their purchase prices. The stock rose 8.89% in the same time period, a large move but nowhere near that of its options on a relative basis.

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.

BITO was last up by 2.03% at $12.80 in midday trade.

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