$JMIA calls deliver fast profits

Jumia (JMIA) traded to a new all-time-high today, yielding large returns on upside option positions opened last week.

On Jan. 21, our Unusual Activity scanners identified the purchase of 3,200 Weekly $50 calls expiring this Friday, Jan. 29, for $0.73 to $1.15 against no open interest with shares at $43.80.

Those calls traded up to $10.80 today, more than 9times their purchase prices. The stock rose 37.37% at the same time, showing how options can quickly outperform their underlying shares by a wide margin.

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.

JMIA spiked to a new all-time-high of $60.67 today and at the close was up 3.21% at $58.79. The online marketplace, operating in several African countries, in recent sessions has climbed higher, above levels not seen since shortly after its IPO.