$LOW bulls double money

$LOW bulls double money

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Bullish option traders built fast profits on upside positions opened in Lowe’s (LOW) Friday afternoon.

On Mar. 31Market Rebellion’s Unusual Option Activity Service identified the purchase of 5,500 Weekly $205 calls for $0.45 to $0.57 with shares at $199.43. The volume was well above the open interest of 89 contracts at the time, indicating that this was a new position.

Those calls traded for as much as $1.21 today, at least double their purchase prices.  The stock rose 1.74% in the same time period, a huge move but still nowhere near that of its options 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.

LOW was last trading at $202.70, up 1.37% today.

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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