Bulls run up the score on $GLUU

Option traders tripled their money today on Glu Mobile (GLUU) after its earnings report yesterday afternoon.

On Apr. 14, Market Rebellion’s Unusual Activity Service found that 3,000 June $6 calls were bought for $1.36 to $1.41 with shares at $6.66. This was clearly fresh buying, as open interest in the strike was only 1,948 contracts before that session began.

Those calls traded for $4.50 this afternoon, more than 3 times their purchase prices. The stock surged 57.66% in the same time period, an enormous move but one that was still dwarfed by the gain of its options on a relative basis.

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 14.53% to close at $10.25 today, just off its fresh 52-Week high made earlier in the session at $10.72. The mobile-game developer reported better than exepcted top lone earnings results after the closing bell yesterday, and Piper Sandleer raised its price target on the shares to $10.50 from $8 this morning.