Bulls double money in $TWLO

Upside option positions opened in Twilio near the end of last year are paying off today.

Back on Dec. 14, Investitute’s market scanners found that 2,000 July $125 calls were bought for $8.15 as part of a bullish roll with shares at $91.41. This was clearly a new position, as open interest in the strike was a mere 8 contracts before that session began.

Those calls traded for as much as $16.17 today, about twice their purchase price. The stock surged 45.98% in the same time period, a large move but still far below 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.

TWLO was up 2.62% to $131.94 today. The cloud-platform company topped quarterly expectations and raised guidance after the market closed Tuesday.