$RUN call prices heat up

Option traders have nearly tripled their money on upside positions in Sunrun (RUN).

On Jun. 1, Market Rebellion’s Unusual Activity tracking systems detected the purchase of 2,000 December $18 calls for $3.15 as part of a bullish roll with shares at $17.61. Volume was well above the strike’s previous open interest of 169 contracts, showing that this was fresh interest.

Those calls ended the day marked for $9.40, nearly triple their purchase prices. The stock rose 48.78% in the same time period, a large move but nowhere near that of its options on a relative basis.

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.

RUN ended the session up 22.63% at $26.17 this afternoon. The solar-energy company announced this morning that it will acquire Vivint Solar (VSLR) in an all-stock transaction