$VIX call prices double in session

The CBOE Volatility Index climbed as sentiment during earnings season was digested, yielding large returns on option positions.

Just this morning, Investitute’s tracking systems cited the purchase of 50,000 May $25 calls expiring on May 16th for $0.43. Those calls traded for $0.90 before the day was finished, more than twice their purchase price.

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.

VIX rose 10.28% to 18.02 today. The index, which does not have a dollar value, trades inversely to the S&P 500.