Education
$UPS bulls double their money
United Parcel Service keeps delivering returns on upside option positions. On July 25, Investitute’s proprietary programs cited the purchase of 12,000 September $120 calls for $1.94 to $2.10, including one print of 8,659, with shares at $118.19. These were clearly new positions, as open interest in the strike was only 770 contracts before the trades […]
United Parcel Service keeps delivering returns on upside option positions.
On July 25, Investitute’s proprietary programs cited the purchase of 12,000 September $120 calls for $1.94 to $2.10, including one print of 8,659, with shares at $118.19. These were clearly new positions, as open interest in the strike was only 770 contracts before the trades occurred.
Those calls sold for $5.05 today, about 2.5 times their purchase prices. The stock rose
5.14% in the same time frame, illustrating the kind of leverage that can be achieved with options.
It was the second winning UPS trade posted on Investitute in the last week. In addition, Investitute co-founder Jon Najarian also cited the purchase of September $123 calls on CNBC’s “Halftime Report” last Friday.
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.
UPS was up 1.19% to $124.34. The delivery giant rallied after topping quarterly estimates last month and has been grinding higher since.