Bulls run higher with $FIT

Option traders have doubled their money on upside positions in Fitbit (FIT).

On Sept. 6, Market Rebellion’s proprietary programs flagged the purchase of 11,000 November $4 calls for $0.19 to $0.22 with shares at $3.49. This was clearly fresh buying, as open interest in the strike was only 2,371 contracts before the activity appeared.

Those calls traded for as much as $0.45 today, more than twice their purchase prices. The stock rose 13.18% in the same time frame, illustrating the kind of leverage that can be achieved with options.

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.

FIT reached a session high of $3.97 early today but pulled back with the broader market to trade at $3.88 this afternoon, down 2.15% on the session. The fitness-device maker has rallied on reports that it might be considering a sale.