$UAL call prices take to the skies

Option traders racked up gargantuan gains in United Airlines (UAL) today, thanks to a strong rebound in demand.

On May. 29, our Unusual Activity Service found that 5,000 Weekly $40 calls expiring next Friday on Jun. 12 were bought in one print for $0.14 above open interest of 114 contracts with shares at $28.14.

Those calls traded for $10.70 today, just over 76 times their purchase prices. The stock flew 73.42% in the same time period, underscoring how options can far outperform 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.

UAL jumped 8.45% to $42.40 today. The airline rallied along with its peers, and the broader market, as the employment situation in the U.S. strengthened and demand for flights has increased.