Bullish option traders are hitting big profits in upside positions on Bank Ozk (OZK).
On Jun. 1, Market Rebellion’s Unusual Option Activity Service found that 2,999 June $36 calls were bought for $1.15 with shares at $35.45. This was clearly fresh buying, as the open interest in the contract before the activity appeared was just 27.
Those calls traded for as much as $5.00 today, a 334.78% return, while the stock rose 15.99% in the same time period, underscoring how options can far outperform their underlying shares.
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.
OZK was last up 5.79% at $41.45.
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