$SOLO calls keep driving gains

Bullish option traders’ calls are driving big gains again today in Canadian electric-vehicle maker ElectraMeccanica (SOLO).

On Nov. 19, Market Rebellion’s Unusual Activity Service flagged the purchase of 7,000 November $9 calls expiring today for $0.25 to $0.65 with shares at $8.45. This was clearly fresh buying, as open interest in the strike was only 274 contracts before that session began.

Those calls have traded up to $4.49 so far today, at least 6.5 times their purchase prices. The stock rose 60% in the same time, underscoring how options can far outpace gains in their underlying shares on a relative basis.

It is the third winning trade in the name to be posted by 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.

SOLO was last up 30.02% at $12.53, printing a new 52-Week high this session.