$SNAP bulls rack up 7-fold gains

It took only a week for option traders to log exponential profits on upside positions in Snap.

On March 7, Investitute’s proprietary programs showed that 3,000 Weekly $10 calls expiring on March 22 were bought for $0.15 to $0.23 with shares at $9.62. This was clearly fresh buying, as volume was about triple the strike’s previous open interest.

Those calls sold for as much as $1.40 this afternoon, more than 7 times their average purchase price. The stock rose 17.98% in the same time frame, illustrating the kind of leverage that can be achieved with options in a relatively brief period.

Investitute co-founder Jon Najarian cited even more buying in the Weekly $10.50 calls at the same expiration today on CNBC’s “Halftime Report.”

Long calls lock in the price where a stock can be purchased, gaining with a rally and providing leverage to the underlying shares. The contracts can quickly lose value if the stock stalls or pulls back but also carry less risk than owning the shares themselves.

SNAP surged 12.24% to $11.28 today. This morning BTIG upgraded the social-network operator to “buy” from “neutral” with a $15 price objective, while Jefferies raised its target to $11 from $9.