$PINS bulls keep putting gains on the board

Option traders scored more big profits today on upside positions in Pinterest (PINS) with shares at fresh highs.

On Aug. 19, Market Rebellion’s Unusual Activity tracking systems detected the purchase of 13,000 November $38 calls for $3.85 to $4.10 with shares at $35.21. Volume was well above the strike’s previous open interest of just 238 contracts, showing that this was fresh interest.

Those calls have traded for as much as $14.55 this morning, well over 3.5 times their purchase prices. The stock rose 47.29% in the same time frame, showing how quickly options can far outperform their underlying shares.

It is the second winning trade in the name to be posted on Market Rebellion in the past week.

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.

PINS was last up 9.31% to $49.54 this morning. The social networking service printed a new all-time high of $52.05 today and was upgraded to a Buy from Neutral at Goldman Sachs this morning, which raised its price target for the shares to $61 from $37.