$BOX call prices double in hours

Option traders who opened bullish positions in Box this morning were racking up large gains by early afternoon.

Just after the opening bell, Investitute’s market scanners identified the purchase of 2,200 January $17 calls for $0.60 to $0.90 with shares at $16.73. This was clearly fresh buying, as volume was double the strike’s open interest before the activity appeared.

Those calls traded up to $1.80 by 2 p.m. ET, about 2.5 times their average purchase price. The stock rose 9.74% at the same time, showing how quickly options can far outpace gains in 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.

BOX ended today’s session up 8.89% to $18.38. The software-as-a-service company spiked higher this morning amid buyout speculation.