$SBUX option bulls order up gains

$SBUX option bulls order up gains

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Option traders were served big gains in Starbucks (SBUX) as shares percolated today.

On Apr. 11Market Rebellion’s Unusual Option Activity Service found that 12,000 Weekly $107 calls, expiring today, were bought for $0.31 to $0.44 with shares at $105.20. This was clearly fresh buying, as open interest in the contract was just 520 before the activity appeared.

Those calls have traded for up $1.20 today, a 172.72% return, while the stock rose 2.77% 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 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.

SBUX was last at $107.32, up 0.31%.

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