$SPY call buyers score at highs

Bullish option traders are collecting big profits in the SPDR S&P 500 Fund (SPY) today.

On Feb. 29, Market Rebellion’s Unusual Activity Service detected the purchase of 95,000 Weekly $515 calls, expiring Mar. 22, for $2.61 to $2.66 with shares at $507.45. Open interest in the strike before the trade occurred was just 5,615 contracts, showing that this was a new position.

Those calls traded for as much as $9.20 today, a 245.86% return, while the stock rose 3.27% at the same time, underscoring how quickly options can far outperform their underlying shares.

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.

SPY ended the session higher by 0.33% today at $522.20.

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