$UPS call prices rocket sixfold

United Parcel Service delivered huge returns on upside option positions today.

On June 28, Investitute’s market scanners found that 6,500 Weekly $110 calls expiring this Friday were bought for $1.48 to $1.57 with shares at $105.70. These were clearly new positions, as open interest in the strike was a mere 84 contracts before those trades occurred.

Those calls sold for as much as $8.99 this afternoon, 6 times their purchase prices. The stock rose 12.54% in the same time frame, underscoring how 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 jumped 6.91% to $120.21 today. The package-delivery giant surpassed second-quarter expectations on the top and bottom lines this morning.