Call buyers $DASH for profits

Call buyers $DASH for profits

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Option traders are making big gains in bullish positions opened on DoorDash (DASH).

On Feb. 20, Market Rebellion’s Unusual Activity Service identified the the purchase of 34,000 May $90 calls for $24.42 to $24.43 with shares at $111.13. Volume was clearly above the previous open interest of 265 contracts, indicating that this was a new position.

Those calls have traded for up $49.14 today, a 101.15% return, while the stock surged 24.29% in the same time period, an enormous move but one that was still dwarfed by the gain 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.

DASH ended the session up by 0.42% to $137.82.

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