$SOLO bulls keep running up gains

Bullish option traders are running up big gains again today in upside positions opened in Canadian electric-vehicle maker ElectraMeccanica (SOLO).

On Nov. 12, Market Rebellion’s Unusual Activity Service flagged the purchase of 4,300 December $4 calls for $0.50 to $0.70 with shares at $3.94. This was clearly fresh buying, as open interest in the strike was only 3,363 contracts before that session began.

Those calls have traded up to $4.70 so far today, at least 6.5 times their purchase prices. The stock rose 120.81% in the same time, underscoring how options can far outpace gains in their underlying shares on a relative basis.

It is the second winning trade in the name to be posted by Market Rebellion in the past week.

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.

SOLO was last up 21.40% at $8.39, printing a new 52-Week high this session.