Bulls sail to new highs in $SE

Option traders logged large profits from upside positions in Sea Limited today for the second time in less than a week.

On April 5, Investitute’s market scanners identified the purchase of 5,300 June $25 calls for $1.40 to $1.60 with shares at $23.11. This was clearly fresh buying, as open interest in the strike was only 624 contracts before the activity appeared.

Those calls traded for as much as $7 today, 5 times their initial purchase price. The stock surged 38% in the same time period, a huge gain but still nowhere near that of its options on a relative basis.

It is the second winning trade in the name posted on Investitute since May 17. Investitute co-founder Jon Najarian cited the unusual activity in choosing Sea for his final trade on CNBC’s “Halftime Report” today.

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.

SE reached an all-time high of $32 today before closing at $31.50, up 24.06% on the session. Last night the Singapore-based digital entertainment, e-commerce, and financial-services company reported that quarterly active users reached 271.6M, up 114.4% from last year, while first-quarter revenue per user rose to $1.40 from $1.20 in the same period.