Option bulls are being rewarded today with big profits on upside positions in Goldman Sachs Group Inc (GS).
Those calls have traded for as much as $3.20 during this session, a 166.67% return, while the stock rose 6.91% in the same time frame, showing how options can far outperform their underlying shares 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.
GS was last at $350.73, up 2.99% on the session.
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