$UNG call prices light up at highs

Bullish option traders are turning a hefty profit today on the U.S. Natural Gas Fund (UNG) in positions opened less than one week ago.

On Apr. 12, Market Rebellion’s Unusual Activity Service found that 5,000 Weekly $25 calls, expiring next Friday, were bought for $0.76 above the existing open interest of 82 contracts with shares at $23.10.

Those calls sold for as much as $3.50 today, over 4.5 times their purchase price. The stock rose 21.52% in the same time period, illustrating the kind of leverage that can be achieved with options.

Long calls lock in the price where a stock can be purchased, gaining with a rally and providing leverage to the underlying shares. The contracts can quickly lose value if the stock stalls or pulls back but also carry less risk than owning the shares themselves.

UNG has climbed today, last up 6.48% to $27.26 today after setting a new 52-Week high of $28.14 earlier in the session.