Bullish players score big in $TTWO

Take-Two Interactive Software (TTWO) has spiked higher after good quarterly numbers and a positive outlook, sending big profits to upside option traders who played calls.

On Jul. 1, Market Rebellion’s Unusual Activity programs detected the purchase of 2,000 August $145 calls for $7.20 to $7.50 with shares at $141.30. This was clearly fresh buying, as open interest in the strike was only 114 contracts before that session began.

Those calls have traded up to $31.50 so far today, more than 4 times their purchase prices. The stock has thus far risen 26.18% in the same time period, an impressive rally 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.

TTWO is currently higher on the day by 3.18% to $173.01. The game developer reported strong sales and raised its guidance for the fiscal year after the closing bell yesterday.