Bullish options in Eastman Kodak rocketed to astronomic heights overnight.
Late yesterday afternoon, Investitute’s tracking systems detected the purchase of 3,700 January $7.50 calls for $0.20 to $1.45 with shares at $7. These were clearly new positions, as open interest in the strike was only 586 contracts before the activity appeared.
Those calls traded for $5.90 this morning, more than 29 times their original purchase price. The stock soared 84.3 percent at the same time, an enormous gain but one that still paled in comparison to that of its options on a relative basis.
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.
KODK rocketed 57.35 percent to $10.70 today. The company spiked higher after announcing late yesterday that it was developing a cryptocurrency a blockchain system to protect digital photography rights.