$S call buyers collect big profits

Option traders are collecting big profits on upside positions in SentinelOne Inc (S) today.

On Dec. 5, Market Rebellion’s Unusual Activity Service found that 3,500 Weekly $22 calls, expiring Dec. 8, were bought for $0.80 above the existing open interest of 1,230 contracts with shares at $19.88.

Those calls have traded up to $1.23, a 53.75% return, while the stock rose 16.7% in the same time period, underscoring how 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.

S was last up by 0.75% at $23.50.