Bulls double their money in $GLUU

Option traders doubled their money today on Glu Mobile (GLUU).

On Feb. 18, Market Rebellion’s Unusual Activity Service found that 5,800 June $7 calls were bought for $1.14 to $1.30 with shares at $7.36. This was clearly fresh buying, as open interest in the strike was only 1,059 contracts before that session began.

Those calls traded for $2.95 this afternoon, more than twice their purchase prices. The stock surged 35.33% in the same time period, an enormous move but one that was still dwarfed by the gain 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.

GLUU was up 14.98% to close at $9.98 today. The mobile-game developer’s stock was reiterated as an Overweight and Buy by Piper Sandler and Benchmark this morning, respectively.