$BLMN calls surge 11-fold

Bullish option traders turned huge profits in Bloomin’ Brands (BLMN) today.

On Aug. 21, Our proprietary programs flagged the purchase of 3,400 September $17.50 calls for $0.15 to $0.25 with shares at $15.48. Open interest in stock was a mere 41 contracts before that session began, showing that this was fresh buying.

Those calls have traded up to $1.65 so far today, 11 times their initial purchase price. The stock rose 12.66% in the same time frame, underscoring how quickly options can far outperform their underlying shares.

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.

BLMN is up 7.49% to $18.02 heading into today’s closing bell. Shares of the restaurant chain spiked higher this afternoon on news that activist investment firm Jana Partners has taken a 9% stake in the company.