$KNBE option bulls score

Option traders are scoring big gains on short-term positions opened in Knowbe4 Inc (KNBE) last week.

On Oct. 6Market Rebellion’s Unusual Option Activity Service found that 3,800 October $22.50 calls, expiring next Friday, were bought for $0.95 to $1.40 above open interest of just 2,181 contracts with shares at $22.20.

Those calls traded for as much as $2.05 so far today, at least a 45% increase from their purchase prices. The stock rose 9.55% in the same time frame, illustrating the kind of leverage that can be achieved quickly 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.

KNBE was last up 12.81% at $24.36 this session.

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