Bulls keep riding rally in $TWTR

Option traders are racking up exponential gains as Twitter continues to rip higher after strong earnings.

On Oct. 3, Investitute’s tracking systems detected the purchase of 4,300 March $18 calls for $1.67 to $1.79 with shares at $17.39. Volume was well above the strike’s open interest of 2,391 contracts, indicating that this was fresh buying.

Those calls traded for $13.50 yesterday, 8 times their original purchase price. The stock soared 79.4% in the same time period, a huge move but one that still paled in comparison to its options. It is the second winning Twitter trade posted on Investitute in as many days.

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.

TWTR rose 4.41% to $31.51 yesterday. The social-media company beat quarterly estimates and reported strong user growth Thursday morning.