$KRE bulls bank profits

$KRE bulls bank profits

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Bullish option traders are banking profits in upside positions on the SPDR S&P Regional Banking ETF (KRE).

On Apr. 18Market Rebellion’s Unusual Option Activity Service found that 18,000 Weekly $45 calls, expiring on May 5, were bought for $0.45 to $0.46 above the existing open interest of 121 contracts with shares at $42.50.

Those calls traded traded for as much as $1.19 this session, a 158.7% return, while the stock rose 4.87% in the same time frame, illustrating the kind of leverage that can be achieved 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.

KRE was last up 44.08% at $44.37.

Ready to start trading? Try Unusual Option Activity Essential. Learn how you can follow the “smart money” with a fresh UOA trade idea each week – including technical levels so that you know how to manage each trade!

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