Bulls triple their money in $CIEN

Traders racked up big profits in Ciena today for the second session in a row.

On Aug. 27, Investitute’s tracking systems detected the purchase of 5,000 January $30 calls for $1.43 to $1.49 with shares at $27.93. This was clearly a new position, as open interest in the strike was only 1,040 contracts before the trade occurred.

Those calls sold for $5.08 this afternoon, about 3.5 times their purchase prices. The stock rose 24.6% in the same time period, a large move but nowhere near that of its options. It was the second winning trade in Ciena posted on Investitute in as many days.

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.

CIEN reached a session high of $35.87 in midday trading before pulling back to close at $34.55, down 1.03% on the session. The networking-equipment maker topped earnings and sales expectations yesterday morning.