Options News
$YELP bulls double their money
Some good picks on Yelp paid off for upside option traders today. On Nov. 12, Investitute’s tracking systems detected the purchase of 5,000 February $35 calls in one print for $2.44 and $2.45 with shares at $31.95. This was clearly a new position, as open interest in the strike was a mere 33 contracts before […]
Some good picks on Yelp paid off for upside option traders today.
On Nov. 12, Investitute’s tracking systems detected the purchase of 5,000 February $35 calls in one print for $2.44 and $2.45 with shares at $31.95. This was clearly a new position, as open interest in the strike was a mere 33 contracts before the trade occurred. Investitute co-founder Jon Najarian cited the unusual activity at that time on CNBC’s “Halftime Report.”
Those calls traded for $4.50 this morning, nearly double their purchase prices. The stock rose 13.14% in the same time frame, showing 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.
YELP spiked to $36.38 in early trading but pulled back with the rest of the market to close at $34.59, up 0.52% on the session. The social-reviews network, which announced a $250 million share-buyback program on Nov. 28, jumped this morning on news that it will replace GulfPort Energy (GPOR) in the S&P MidCap 400 Index on Dec. 12.