$SNAP calls send bulls profits

Snap (SNAP) has been moving higher this week and bullish option traders are cashing in today.

On Sep. 18, Market Rebellion’s Unusual Activity Scanners found that 12,500 Weekly $24 calls, expiring Sep. 25, were bought for $0.57 with shares at $23.64. This was clearly fresh buying, as open interest in the strike was only 3,534 contracts before that session began.

Those calls have traded for as much as $1.54 today, nearly 3 times their purchase price. The stock rose 7.45% 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 this session was last up 5.74% to $25.25. The social media company is estimated to report earnings next on Oct. 27.