$RTX call prices turn higher

Option traders doubled their money on bullish positions in Raytheon Technologies (RTX) today.

On Jan. 8, Market Rebellion’s Unusual Activity Service identified the purchase of 6,189 May $75 calls for $3.21 with shares at $69.85. This was clearly fresh buying, as open interest in the strike was only 1,471 contracts before the activity appeared.

Those calls sold for as much as $8.20 this afternoon, over 2.5 their purchase price. The stock rose 18.95% in the same time frame, showing how quickly options can far outpace gains in 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.

RTX closed up by 0.33% at $83.08 today. The aerospace and industrial manufacturer’s price target was raised to $97 from $91 this morning at Susquehanna.