$TFC option buyers deposit gains

$TFC option buyers deposit gains

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Option traders are collecting big gains in upside positions on Truist Financial Corp (TFC) today.

On Oct. 6Market Rebellion’s Unusual Activity Service found that 10,000 January $32.50 calls were bought for $0.55 to $0.60 above the existing open interest of 3,099 contracts with shares at $26.92.

Those calls have traded up to $2.74, a 356.67% return, while the stock rose 27.41% 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.

TFC was last up by 2.81% at $33.99.

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