$MARA option bulls mine gains

Marathon Patent Group (MARA) has been rallying sharply this week, returning fast gains on option positions opened just a couple of sessions earlier.

On Jul. 19Market Rebellion’s Unusual Option Activity Service found that 14,000 Weekly $12 calls, expiring this Friday, were bought for $0.29 to $0.68 with shares at $10.60. This was clearly fresh buying, as open interest in the contract was just 4,851 before the activity appeared.

Those calls have traded for up $1.28 today, more than double their average purchase price. The stock surged 23.02% in the same time period, an enormous move but one that was still dwarfed by the gain 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.

MARA was last at $12.61, up 1.13% on the session.

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