$UPS call prices quadruple

Bullish option traders are being delivered profits on upside positions in United Parcel Service (UPS) ahead of its earnings report.

On Jan. 21, Market Rebellion’s Unusual Activity Service found that 5,000 March $210 calls were bought for $5.36 as part of a bullish spread above open interest of 1,219 contracts with shares at $201.32.

Those calls traded up to $23.07 today, more than quadruple their purchase price. The stock rose 15.19% at the same time, showing how quickly options can far outperform their underlying shares.

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.

UPS finished lower on the day by 1.47% to $228.69.