$UXIN call prices jump 4-fold

Option traders have racked up exponential profits on bullish positions in Uxin.

On Feb. 15, Investitute’s propietary programs cited the purchase of 5,300 March $5 calls for $0.25 to $0.35 with shares at $4.03. This was clearly fresh buying, as open interest in the strike was only 1,083 contracts before that session began.

Those calls traded for as much as $1.10 today, more than 4 times their initial purchase price. The stock rallied 2.68% in the same time frame, 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.

UXIN spiked to $5.85 early this morning before pulling back to close at $4.70, still up 2.17% on the session. The Beijing-based car e-commerce platform has rallied along with other Chinese companies on optimism over trade talks.