$TECS calls deliver quick gains

The Direxion Daily Technology Bear 3X Shares ETF (TECS) bounced strongly today, delivering a quick turnaround for bullish option trades placed yesterday.

Just yesterday, Market Rebellion’s Unusual Activity programs flagged the purchase of 2,200 Weekly $6 calls expiring next Thursday, Apr. 9, in one print for $0.45 with shares at $5.26. This was clearly a new position, as open interest in the strike was only a mere 166 contracts before that session began.

Those calls traded for as much as $1.00 this afternoon, more than double their purchase price. The stock rose by 22.62% in the same time frame, illustrating the kind of leverage that can be achieved with options.

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.

TECS ended the session up by 13.1% at $6.39. The ETF inversely tracks 300% of the daily performance of the Technology Select Sector Index, of which Apple (AAPL) is a leading component, which declined this session after the ADP payroll report where private payrolls fell 27,000 in March after rising 179,000 in February.