$ADBE bulls post quick gains

Upside option positions tripled this morning as Adobe (ADBE) shot higher.

On Nov. 1 , Market Rebellion’s activity scanners identified the purchase of 3,000 Weekly $295 calls, expiring on November 8, for $1.07 to $1.09 as part of a bullish spread with shares at $277.55. This was clearly a new position, as open interest in the strike was only 141 contracts before the trade occurred.

Today those calls traded up to $3.40 just after the opening bell, more than 3 times their original purchase prices. The stock rose 5.49% in the same time period, an impressive move but nowhere near the gains in its options.

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.

ADBE gapped higher to open at $292.11 this morning but has since pulled back to $287.97, still up 3.77% on the day. The software maker spiked higher after its financial analyst meeting yesterday.