$SDC bulls have more to smile about

Option traders who opened bullish positions in SmileDirectClub (SDC) just over a week ago are aligning themselves with even more gains today.

On May 1, Market Rebellion’s Unusual Activity programs found that 2,352 May $7.50 calls were bought as part of a bullish roll for $0.85 to $0.87 with shares at $7.43. Volume was well above the strike’s existing open interest of 1,222 contracts, indicating that this was fresh buying.

Those calls have traded for as much as $1.85 today, at least double their purchase prices. The stock rose 24.23% at the same time, showing how quickly options can far outpace gains in their underlying shares.

It is the fourth winning position in the name posted on Market Rebellion in the past several weeks, beginning Mar. 26.

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.

SDC was higher by 14.59% today to close at $9.19. Shares of the teledentistry company continued their rise today after last week’s announcement that it had partnered with new U.S. insurers to offer increased access to orthodontic care.