$PINS call buyers post up gains

Option traders scored big gains today on upside positions in Pinterest (PINS) with shares at fresh highs.

On Oct. 21, Market Rebellion’s Unusual Activity Scanners found that 5,000 December $50 calls were bought for $6.17 with shares at $50.02. This was clearly fresh buying, as open interest in the strike was only 555 contracts before that session began.

Those calls have traded for as much as $20.00 today, well over 3 times their purchase prices. The stock rose 37.68% in the same time frame, showing how quickly options can far outperform their underlying shares.

It is the fourth winning trade in the name to be posted on Market Rebellion this month.

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 up 28.75% to $62.78. The social networking service topped estimates during its earnings report yesterday after the closing bell.