$TDOC bulls diagnosed with more gains

Option traders are logging big profits on upside positions opened in Teladoc (TDOC) just under one week ago.

On Jan. 20, Market Rebellion’s Unusual Activity Service detected the purchase of 2,100 Weekly $250 calls, expiring today, Jan. 29, for $1.05 to $4.15 to $9.40 with shares at $235.12. This was clearly fresh buying, as open interest in the strike was just 727 contracts before the activity appeared.

Those calls traded for as much as $44.00 today, over 4.5 times their purchase prices. The stock rose 24.88% at the same time, underscoring how quickly options can far outperform their underlying shares.

This marks the second winning trade in the name to be posted on 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.

TDOC closed down by 0.32% to $286.23 today. The telemedicine and virtual healthcare company’s price target was raised to $330 from $260 at BTIG this morning.