Bulls quadruple money in $RUBI

Option traders have scored exponential profits on upside positions opened in The Rubicon Project (RUBI) last fall.

On Nov. 8, Market Rebellion’s Unusual Activity Service flagged the purchase of 3,100 March $7.50 calls for $1.30 as part of a bullish roll with shares at $7.92. Open interest in that strike was a mere 309 contracts before that session began, showing that this was a new position.

Those calls have traded for as much as $5.30 so far today, more than 4 times their purchase price. The stock surged 61.24% in the same time period, underscoring how quickly options can far outperform their underlying shares.

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.

RUBI is up 8.02% to $12.79 in midday tradng. The advertising-technology platform, which has rallied since announcing a merger with Telaria in mid-December, is scheduled to report earnings after the market closes on Feb. 26.