It took only a few hours for bullish option positions in 3-D Systems to draw big gains today.
This afternoon Investitute’s proprietary programs found that 1,950 Weekly $9 calls expiring this Friday were purchased for $0.24 to $0.50 with shares at $9.33. Open interest in the strike was only 553 contracts before the trade occurred, indicating that this was fresh buying.
Those calls traded for $0.74 by the closing bell, more than tripling in value. The stock rose less than 4 percent at the same time, reflecting the type of leverage that can be obtained with options.
Long calls lock in the price where a stock can be purchased, gaining with a rally and providing leverage to the underlying shares. The contracts can quickly lose value if the stock stalls or pulls back but also carry less risk than owning the shares themselves.
DDD jumped 9.58 percent ot $9.61 today. The heavily shorted 3-D printing company rallied in the last hour of trading on no apparent news as the broader market sold off.