$YELP bulls post positive returns

Bullish traders posted positive returns in Yelp (YELP) before their options expired this afternoon.

On Nov. 20, Market Rebellion’s Unusual Activity scanners identified the purchase of 4,900 Weekly $32.50 calls for $0.65 to $0.90 as part of a bullish roll with shares at $31.84. These were clearly new positions, as open interest in the strike was only 2,443 contracts before the activity appeared.

Those calls traded for $1.72 today, more than 2 times their average purchase price. The stock rose 7.26% in the same time frame, 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.

YELP reached $34.38 this morning before pulling back to close at $34.26, still up 1.06% on the abbreviated session. The social-review network has rallied sharply since reporting earnings on Nov. 5.