Bulls take a quick $TRIP to profits

Bullish option traders posted fast, exponential gains in TripAdvisor (TRIP) today.

Earlier this morning, Market Rebellion’s Unusual Activity Service detected the fast purchase of 3,500 April $19 calls, expiring this Friday, for $0.15 to $0.45 with shares at $17.90. This was clearly fresh buying, as open interest for the contract was only 329 before that session began.

Those calls traded for $1.88 less than two hours later, at least 4 times their purchase prices. The stock rose 11.45% in the same time frame, a large move but nowhere near that of its options.

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.

TRIP ended today up by 6.24% to close at $19.24 after spiking to $20.07 earlier in the session. The travel-review service is expected to report earnings around May 5.