$SNAP bulls see big gains intraday

Option traders who opened upside positions in Snap this morning ended the day with enormous gains.

Today Investitute’s tracking systems showed that 6,600 Weekly $15 that expire this Friday were purchased for $0.08 to $0.40 with shares at $15.20. Volume was well above the strike’s open interest of 3,581 contracts, indicating that this was fresh buying.

Those calls ended the session trading for $0.97, more than 12 times their original purchase price. The stock rose 9.5 percent at the same time, an impressive move but one that still paled in comparison to that of its options.

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.

SNAP surged 11.44 percent to $15.98 today, its largest one-session gain since going public in early March. The heavily shorted stock spiked higher after Credit Suisse raised its price target on the social-media company to $20 from $17 based on improved estimates for daily active users.