$PTON option bulls ride for fast profits

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

On Feb. 4, Market Rebellion’s Unusual Activity Service found that 16,000 Weekly $25 calls, expiring this Friday, were bought for $1.84 to $2.45 above the previous open interest of just 441 with shares at $24.14.

Those calls sold for as much as $8.20 today, about 4 times their purchase prices. The stock rose 31.32% in the same time frame, underscoring how quickly options can far outperform their underlying shares.

This winning upside trade follows on the back of a winner to the downside posted on Market Rebellion earlier 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 23.03% at $30.30.