$SAVE call prices soar

Bullish option traders scored exponential gains in Spirit Airlines (SAVE) as shares soar today.

On Nov. 5, Market Rebellion’s Unusual Activity tracking systems detected the purchase of 13,750 November $20 calls for $0.40 to $0.55 with shares at $17.68. This was clearly new position as the volume was well above the day’s previous open interest of 9,405 contracts, indicating fresh buying.

Those calls traded up to $3.30 today, about 6 times their purchase prices. The stock rose 29.81% 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.

SAVE spiked higher today, last up 15.26% to $58.76. The discount airline rallied along with its peers this session after positive vaccine news from Pfizer (PFE).