$SPCE call prices rocket higher

Option traders are racking up exponential profits today on bullish positions opened in Virgin Galactic Holdings (SPCE) only one month ago.

On Nov. 27, Market Rebellion’s Unusual Activity Service found that 5,100 January $9 calls were bought for $0.40 to $0.55 with shares at $7.35. This was clearly fresh buying, as open interest was only 971 contracts before the activity appeared.

Those calls traded for as much as $2.75 so far today, more than 5.5 times their average purchase price. The stock rose 56.46% 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 is currently up 5.32% trading for $11.48 this session. The spaceflight company, founded by Richard Branson, has rocketed higher since its lows made late last month.