Option bulls post gains in $FB

Option traders are posting large gains today on bullish positions opened in Facebook (FB) a couple of sessions ago.

On Mar. 29, Market Rebellion’s Unusual Activity scanners found that 4,400 Weekly $292.50 calls expiring tomorrow, Apr. 1, were bought for $1.75 to $3.15 with shares at $285.93. The volume was well above the contract’s previous open interest of 2,301 which indicated that this was a new position.

Those calls have traded up to $4.80 today, about double their average purchase prices. The stock rose 3.62% 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.

FB was up 2.27% to close at $294.53 this afternoon.