$SPWR option bulls book fast gains

Option traders have scored fast gains in upside bets on SunPower Corporation (SPWR).

Today on Mar. 29, Market Rebellion’s Unusual Option Activity Service found that 3,000 Weekly $13 calls, expiring next Thursday, were bought for $0.34 to $0.37 with shares at $12.65. This was clearly fresh buying, as open interest in the contract was just 89 before the activity appeared.

Those calls traded up to $0.69 today, about 2 times their purchase prices. The stock rose 4.27% in the same time period, 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.

SPWR settled the session at $13.07, up 7.13% for the day.

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