Yesterday on Feb. 14, Market Rebellion’s Unusual Activity Service found that 18,000 February $19 calls, expiring this Friday, were bought for $1.00 to $1.27 above the existing open interest of 1,559 contracts with shares at $16.67.
Those calls have traded for up to $2.85 so far today, at least 2 times their purchase prices. The stock rose 30.17% in the same time frame, showing how quickly options can far outpace gains in 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.
UPST was last up 26.61% at $21.33 in afternoon trade.
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