$BKI bulls bag profits

Bullish option traders are bagging big profits in Black Knight Inc (BKI) calls.

On Apr. 22, Market Rebellion’s Unusual Activity Service found that 5,000 July $70 calls were bought as part of a bullish spread for $3.50 above the existing open interest of 31 contracts with shares at $66.20.

Those calls sold for as much as $6.40 today, nearly double their purchase price. The stock rose 13.85% in the same time period, a large move but nowhere near that of its options on a relative basis.

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.

BKI closed by up 14.47% to $72.84 this afternoon.