Option traders found quick profits on upside positions in Palantir (PLTR) today on positions opened Friday.
On Oct. 6, Market Rebellion’s Unusual Activity programs found the the purchase of 8,900 Weekly $17 calls, expiring Oct. 13, for $0.13 to $0.26 above the existing open interest of 5,040 with shares at $15.66.
Those calls have traded for as much as $1.05 today, a 303.85% return, while the stock rose 13.79% at the same time, showing how options can far outperform their underlying shares.
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.
PLTR finished the day up 6.02% at $17.61.
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