$UAA bulls run up profits

Bullish option traders are running up profits in their positions in Under Armour (UAA) today.

On Oct. 20, Market Rebellion’s Unusual Activity Service flagged the purchase of 2,000 Weekly $14 calls expiring today, Oct. 30, for $0.65 as part of a bullish roll with shares at $13.35. This was clearly fresh buying, as open interest in the strike was only 337 contracts before that session began.

Those calls have traded up to $1.13 so far today, nearly double their purchase prices. The stock rose 12.88% in the same time, underscoring how quickly options can far outpace gains in their underlying shares 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.

UAA is down 0.51% to $13.73 this morning after trading as high as $15.39 earlier in the session. The athletic-apparel retailer topped estimates in its earnings report delivered this morning.