Bulls triple money in $PTON

Option traders have logged big profits on upside positions opened in Peloton (PTON) at the end of last week.

On Nov. 15, Market Rebellion’s Unusual Option Activity Service flagged the purchase of 3,700 January $30 calls for $1 to $1.20 with shares at $27.30. Volume was above the strike’s existing open interest of 2,907 contracts, indicating that this was fresh buying.

Those calls are marked at $3.05 this morning, 3 times their initial purchase price. The stock rose 10.81% 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 closed yesterday at $30.25, up 11.09% on the session. The fitness equipment and service company initially fell after reporting earnings on Nov. 5 but has since rallied sharply, most recently with news last week that billionaire George Soros had increased his holdings in the name.