$DDOG bulls hunt for profits

Datadog (DDOG) is trading higher today, handing profits to bullish option positions opened last Thursday.

On Oct. 1, Market Rebellion’s Unusual Activity Service found that 3,900 Weekly $100 calls, expiring this Friday, Oct. 9, were bought $1.94 to $4.60 with shares at $99.50. This was clearly a new position, as open interest in the strike before that session began was only 1,664 contracts.

Those calls have traded for up to $9.20 so far today, at least 2 times their purchase prices. The stock rose 9.66% in the same time frame, showing how quickly options can far outpace gains in their underlying shares.

It is the second winning trade in the name to be posted on Market Rebellion in the past week.

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.

DDOG was last up 3.45% to $107.51 today. The cloud monitoring service was initiated with a Hold rating at Berenberg this morning.