$BOX call prices rocket 7-fold

Bullish option traders scored exponential gains in Box today.

On Jan. 2, Investitute’s market scanners identified the purchase of 1,350 February $19 calls for $0.60 with shares at $16.73. Open interest in the strike was a mere 30 contracts before that session began, showing that his was a new position.

Those calls traded for as much as $4.60 this afternoon, more than 7.5 times their purchase price. The stock rose 40.64% in the same time period, a huge move but still nowhere near that of its options.

It was the second winning trade in BOX posted on Investitute in the last month. Investitute co-founder Jon Najarian cited the unusual activity on CNBC’s “Halftime Report” today.

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 jumped 8.72% to $23.45 today. The software-as-a-service company, which has been the subject of merger speculations, rallied after Goldman Sachs iniated the name with a “buy” rating and a $31 price target this morning.