$UPS calls deliver profits overnight

Bullish option traders are being delivered profits on upside positions in United Parcel Service (UPS) opened during yesterday’s session.

Yesterday, on Oct. 20, Market Rebellion’s Unusual Activity Service found that 10,500 Weekly $197.50 calls, expiring tomorrow, were bought for $0.25 to $1.05 above open interest of 430 contracts with shares at $193.62.

Those calls have traded up to $1.97 today, at least triple their average purchase price. The stock rose 2.77% 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 was last up by 1.89% to $198.96 today.