Bulls run up score on $GLUU

Option traders tripled their money on Glu Mobile before their upside positions expired today.

Way back on June 28 of last year, Investitute’s proprietary programs cited the purchase of 5,000 January $6 calls for $1.15 and $1.20 with shares at $6.38. Open interest in the strike was only 197 contracts before the trade occurred, showing that this was a new position.

Those calls traded for $3.80 this afternoon, more than 3 times their purchase prices. The stock surged 51.88% in the same time period, an enormous move but one that was still dwarfed by the gain of its options on a relative basis. It was the second winning trade in the name posted on Investitute in the last week.

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.

GLUU was up 1.36% to $9.69 today. Cowen raised its price target on the mobile-game developer to $9.50 from $8 on Dec. 10, calling it the firm’s “best idea” for 2019. Stephens then initiated the name with an “overweight” rating and a $10.50 target on Jan. 10.