$DLPH calls shift into high gear

Delphi Automotive has climbed as the car industry has gained strength, and bullish option positions are accelerating higher with the move.

On Aug. 23, Investitute’s market scanners identified the purchase of 3,000 October $97.50 calls in one print for $1.95 with shares at $94.01. Open interest in the strike was just 1 contract before the trade occurred, showing that it was a new position.

Those calls traded up to $5 late today, more than 2.5 times its purchase price. The stock rose 8.6 percent 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.

DLPH was up 2.7 percent to $102.31 today. The vehicle powertrain manufacturer has been trending higher since quarterly earnings and revenue beat estimates in early August.