Bulls quadruple money in $EA

Option traders raked in big profits on Electronic Arts today.

On Dec. 14, Investitute’s tracking systems found that 5,000 March $115 calls were purchased for $3.22 as part of a bullish spread with shares at $106.61. Volume was well above the strike’s open interest of 2,496 contracts, showing that this was a new position.

Those calls sold for $14.45 today, 4.5 times their purchase price. The stock rallied 21.5% in the same time, an impressive move but nowhere near that of its options on a relative basis. Shares rallied sharply this afternoon after Investitute co-founder Jon Najarian cited heavy buying in EA’s April calls on CNBC’s “Halftime Report.”

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.

EA was up 1.3% today to close at $128.82 today. The game developer announced today that is expanding its offerings to include six titles from Warner Bros Interactive Entertainment.