$FEYE call prices quadruple

Bullish option traders logged big gains in FireEee (FEYE) today for the second time in less than a week.

On Sept. 30, Market Rebellion’s tracking systems detected the purchase of 3,000 October $14 calls for $0.16 to $0.21. Shares were trading at $13.20 at the time.

Those calls traded for as much as $0.72 today, about 4 times their average purchase price. The stock rose 9.7% in the same time period, underscoring how options can far outperform their underlying shares.

It is the second winning trade in the name posted on Market Rebellion since Oct. 2.

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.

FEYE is up 2.67% to $14.23 in midday trading. Shares rallied last week after Business Insider reported that the cybersecurity company had retained Goldman Sachs for a potential sale. FireEye is holding its analyst day today.

(Disclosure: I own FEYE calls.)