$NU option bulls double money overnight

Option traders are turning fast gains on upside option positions that were opened in Nu Holdings Ltd (NU) yesterday.

Just yesterday, on Aug. 15Market Rebellion’s Unusual Option Activity Service found that 24,000 August $5 calls were bought for $0.18 to $0.30 as part of a bullish roll and complex spread with shares at $4.71.

Those calls have traded for as much as $0.70 this session, over 2 times their purchase prices. The stock gained 19.53% at the same time, a large move but 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.

NU was last higher on the day by 9.40% at $5.12.

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