$SNAP bulls score quick gains

It took only a few days for option traders to quadruple their money on upside positions in Snap (SNAP).

On May 30, Investitute’s tracking systems showed that 12,000 Weekly $12 calls expiring on June 7 were bought for $0.24 to $0.30 above open interest of 1,615 contracts with shares at $11.78. Investitute co-founder Jon Najarian cited the unusual activity at that time on CNBC’s “Halftime Report” and updated the trade today.

Those calls sold for as much as $1 this afternoon, more than 4 times their initial purchase price. The stock rose 10.12% in the same time frame, underscoring how quickly options can far outpace gains in 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.

SNAP jumped 10.78% to $12.95 today. Analysts have become more positive on the social-media company as it has held up relatively well amid weakness in the technology sector.