$SPCE call prices orbit higher

Option traders are racking up big profits today on bullish positions opened in Virgin Galactic Holdings (SPCE) earlier this week.

On Jan. 12, Market Rebellion’s Unusual Activity Service found that 4,750 Weekly $32 calls expiring next Friday, Jan. 29, were bought for $0.59 to $0.70 with shares at $25.94. This was clearly fresh buying, as open interest was only 817 contracts before the activity appeared.

Those calls have traded for as much as $4.25 this morning, at least 6 times their purchase prices. The stock rose 28.87% at the same time, underscoring 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.

SPCE was higher by 19.85% to close at $33.03 this session. The spaceflight company, founded by Richard Branson, lifted sharply today while it was reported that Ark Investment Management has planned a space-exploration ETF.