$SYF bulls run up gains

Bullish option traders are running up exponential gains in Synchrony Financial (SYF).

On Apr. 22, Market Rebellion’s Unusual Activity programs found that 7,400 June $17 calls were purchased for $1.30 to $1.40 as part of a bullish spread, also selling an equivalent amount of downside puts, with shares at $15.84. This was clearly a new position, as open interest in the strike was only 110 contracts before the activity appeared.

Those calls traded for as much as $4.50 today, more than 3 times their average purchase price. The stock rose 33.84% in the same time frame, illustrating how 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.

SYF surged 9.6% to close at $21.35 today. The financial-services firm rallied along with its peers as the U.S. economy continues to open in stages.