Bulls triple their money in $GLUU

Option traders tripled their money today on Glu Mobile (GLUU).

On Jan. 29, Market Rebellion’s Unusual Activity Service found that 5,800 February $8 calls were bought for $1.47 as part of a bullish spread with shares at $8.82. This was clearly fresh buying, as open interest in the strike was only 332 contracts before that session began.

Those calls traded for $4.70 this afternoon, more than triple their purchase price. The stock surged 43.88% in the same time period, an enormous move but one that was still dwarfed by the gain of its options on a relative basis.

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 34.93% to close at $12.67 today. The mobile-game developer is to be acquired by electronic Arta (EA) for $12.50 per share.