Bullish option traders are seeing their call prices tread higher in Goodyear Tire & Rubber (GT) today.
On Mar. 14, Market Rebellion’s Unusual Activity Service detected the purchase of 3,700 June $11 calls for $0.99 to $1.05 with shares at $10.82. Open interest in the strike before the trade occurred was just 284 contracts, showing that this was a new position.
Those calls ended the session marked at $3.50 today, a 233.33% return, while the stock rose 35.86% at the same time, underscoring how quickly 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.
GT finished the session higher by 0.62% today at $14.70.
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