Traders turn quick profits on $GE bounce

General Electric has been beaten down mercilessly for months, but option traders are making significant money as shares rebound.

On Friday, Investitute’s market scanners found that 5,000 Weekly $24.50 calls expiring on Oct. 6 were purchased for $0.13 and $0.14 with shares at $23.80. This was clearly fresh buying, as open interest in the strike was only 350 contracts before the trades occurred.

Those calls were sold for $0.35 just before the end of the day, more than doubling in value just one session later. The stock was up just 3.1 percent at the same time, showing how quickly options can far outpace 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.

GE rose 2.21 percent to $24.46 today. The industrial giant’s top aviation executive made bullish comments about revenue growth late last week.