$SPWR bulls quadruple money

Bullish option traders are basking in big profits from SunPower (SPWR).

On Jan. 13, Market Rebellion’s Unusual Activity Service identified the purchase of 5,200 Weekly $30 calls, expiring tomorrow, Jan. 22, for $1.68 to $2.94 with shares trading at $29.82. This was clearly fresh buying, as open interest in the strike was only 806 contracts before the session began.

Those calls traded for as much as $12.30 today, more than 4 times their average purchase price. Shares surged 41.65% in the same time frame, a huge move but one that still paled in comparison to 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.

SPWR is up 16.46% to $43.52 in mid session trading. The solar-panel manufacturer’s price target was raised to $25 and $23 at JPMorgan and Credit Suisse yesterday, respectively.