Why $ADSK call prices rose sixfold

Bullish option traders posted exponential profits today as Autodesk surged on strong quarterly results.

On Dec. 21, Investitute’s tracking systems identified the purchase of 14,162 March $110 calls for $4.50 as part of a bullish roll with shares at $104.37. This was clearly a new position, as open interest in the strike was only 227 contracts before the trade occurred.

Those calls traded up to $27.12 today, 6 times their purchase price. The stock rallied 32.% in the same time period, a large move but nowhere near that of 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.

ADSK spiked higher by 14.87% to $137.70 today. The construction and engineering design software company beat estimates after the market closed yesterday.