$SDC call prices rise

Option traders who opened bullish positions in SmileDirectClub (SDC) less than 48 hours ago are finding themselves with exponential gains today.

On Oct. 20, Market Rebellion’s Unusual Activity programs found that 5,000 Weekly $12 calls, expiring tomorrow Oct. 23, for $0.06 to $0.20 with shares at $11.06. Volume was well above the strike’s existing open interest of 1,594 contracts, indicating that this was fresh buying.

Those calls have traded for as much as $1.37 today, at least 6 times their purchase prices. The stock rose 20.64% at the same time, 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.

SDC was last higher by 7.87% today at $12.11. The teledentistry company announced today that it has partnered with DECA Dental.