$SNAP calls score big profits

Bullish option traders are cashing in exponential profits on Snap (SNAP) calls today.

On Jul. 16, Market Rebellion’s Unusual Activity programs detected the the purchase 10,000 Weekly $60 calls, expiring today, for $2.83 to $3.85 as part of a bullish roll with shares at $58.26. The volume was well above the contract’s previous open interest of 1,145 which indicated that this was a new position.

Those calls traded for as much as $19.05 today, about 5 times their purchase prices. The stock rose 35.68% in the same time frame, 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.

SNAP was up by 23.76% to close at $77.97 today. The social media company topped earnings expectations during its quarterly report yesterday afternoon.