XPeng (XPEV) shares charged up today, and bullish option traders are making gains.
Those calls have traded for up to $4.00 today, a 700% return, while the stock rose 57.74% 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.
XPEV was up by 27.24% at $19.57.
Ready to start trading? Try Unusual Option Activity Essential. Learn how you can follow the “smart money” with a fresh UOA trade idea each week – including technical levels so that you know how to manage each trade!