$PINS bulls score quick profits

Bullish option positions opened last week in Pinterest (PINS) are paying off this session.

Last week, on Oct. 14, Market Rebellion’s Unusual Activity Service found that 12,000 Weekly $55 calls, expiring this Friday, were bought for $0.24 to $0.48 above open interest of 1,466 contracts with shares at $51.70. Jon Najarian covered this unusual options activity on his 3@3 livestream.

Those calls traded for as much as $8.75 today, over 18 times their purchase prices. The stock rose 22.73% 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.

PINS was last higher on the day by 9.55% to $60.90.