Option traders have unsealed huge gains on upside positions opened in Tupperware (TUP) two sessions ago.
On Oct. 10, Market Rebellion’s Unusual Activity Service detected the purchase of 7,800 Weekly $1.50 calls, expiring Oct. 13, for $0.05 to $0.27 with shares at $1.20. Open interest in the strike before the trade occurred was just 1,107 contracts, showing that this was a new position.
Those calls traded for as much as $1.11 today, a 311.11% return, while the stock rose 115.83% at the same time, underscoring how quickly 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.
TUP settled higher today by 9.44% at $2.55.
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