$PTON bulls click in for profits

Option traders are logging more big profits on upside positions in Peloton (PTON) today.

On Oct. 6, Market Rebellion’s Unusual Option Activity Service flagged the purchase of 5,000 October $115 calls, expiring tomorrow, as part of a bullish spread and roll for $4.00 to $4.07 with shares at $112.22. Volume was above the strike’s existing open interest of 3,302 contracts, indicating that this was fresh buying.

Those calls have traded for as much as $17.00 so far today, more than 4 times their purchase prices. The stock rose 22.05% in the same time frame, underscoring how quickly options can far outperform their underlying shares.

It is the second winning trade in the name to be posted by 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.

PTON was last up 2.66% at $134.94 after reaching a new all-time-high earlier of $137.24 amid some broader market weakness. BofA raised its price target for the fitness equipment and service company’s stock to $150 from $116 this morning.