$PDD option bulls triple money

Option traders scored exponential profits this session on upside call positions opened less than a week ago in Chinese agriculture-focused technology platform Pinduoduo (PDD).

Just last week, on Jun. 23, Market Rebellion’s Unusual Activity Service found that 6,700 July $133 calls were bought for $1.51 to $1.62 with shares at $120.01. This was clearly fresh buying as open interest in the strike before the activity appeared was only 25 contracts.

Those calls traded for as much as $5.81 ahead of the closing bell today, at least 3 times their purchase prices. The stock rose 11.43% at the same time, underscoring 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.