$PTON bulls score fast profits

Option traders are riding for fast profits on upside positions in Peloton (PTON) today.

On Jul. 19, Market Rebellion’s Unusual Activity Service found that 4,300 Weekly $120 calls, expiring this Friday, were bought for $0.46 to $2.73 above the previous open interest of just 2,488 with shares at $116.13.

Those calls sold for as much as $8.10 today, about 3 times their purchase prices. The stock rose 9.76% in the same time frame, 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.

PTON was up 6.69% at $126.35 at the close. The fitness equipment and service company is next estimated to report earnings on Sep. 15.