When investors try to gauge the market's sentiment for a group of stocks, they typically look at who has been buying into them lately with the hopes of understanding the reasoning behind these decisions. However, buying stock is not the only way large traders and market participants express their bullish views on a company's future. In fact, there is a much deeper (and more meaningful) way for them to gain exposure to their views.
This can be done through stock options, calls to be specific, as they go up in value if the underlying stock also goes up in value. Considering that stock options carry two essential factors, investors can see the higher stakes in these instruments. The first factor is leverage, as a decent swing in a stock can make an option's price swing by multiples more, and the second is the timing of the trade since options expire worthless if a move hasn't happened by a certain date.
