Call buyers score fast profits in $JWN

Call buyers score fast profits in $JWN


Call buyers are scoring fast profits in Nordstrom (JWN) today.

On Dec. 7Market Rebellion’s Unusual Activity Service found that 3,000 December $16 calls were bought for $0.30 to $0.33 above the existing open interest of 1,599 contracts with shares at $15.59.

Those calls have traded up to $1.42, a 330.3% return, while the stock rose 8.26% in the same time period, underscoring 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.

JWN was last up 4.95% to $17.16 in midday trading.

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