$BOX call prices triple

Option traders who opened bullish positions in Box ($BOX) less than a couple of weeks ago were racking up large gains by early afternoon today.

On Mar. 10, Our market scanners showed that 8,000 April $21 calls were bought for $1.25 to $1.50 with shares at $20.88. This was clearly a new position, as open interest in the strike was only 354 contracts before the trade occurred.

Those calls traded this session up to $4.55, over 3 times their purchase prices. The stock rose 17.05% in the same time frame, showing 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.

BOX ended today’s session up 4.79% to $23.65. The software-as-a-service company spiked higher this session after a Reuters report that Box is exploring a sale amid activist pressure.