Bulls rack up profits in $PANW

Palo Alto Networks surged to new highs today, turning large gains for option positions overnight.

Just yesterday, Investitute’s proprietary programs showed that 1,550 Weekly $195 calls expiring on April 27 were purchased for $3.40 to $3.65 with shares at $183.46. This was clearly fresh buying, as open interest in the strike was only 69 contracts before those trades occurred.

Those calls sold for $9.10 today, at least 2.5 times their purchase prices. The stock rose 7.5% at the same time, reflecting the kind of leverage that options can provide.

Long calls lock in the price where a stock can be purchased, gaining with a rally and providing leverage to the underlying shares. The contracts can quickly lose value if the stock stalls or pulls back but also carry less risk than owning the shares themselves.

PANW climbed 3.78% today on heavy volume to end the session at $196.40. The cybersecurity company reached a 52-week high of $197.20 just before the close.