Call buyers in $CLDR make fast profits

Cloudera (CLDR) has offered fast profits to upside option traders today.

Just this morning, Market Rebellion’s Unusual Activity Service flagged the purchase of 8,000 June $10 calls for $0.35 to $0.65 with shares at $10.17. This was clearly fresh buying, as open interest in the strike was only 5,695 contracts before the activity appeared. Market Rebellion co-founder Jon Najarian noted the unusual activity earlier this afternoon on CNBC’s “Halftime Report.”

Those calls have traded for as much as $2.30 so far today, at least 3.5 times their purchase prices. The stock has risen 20.45% in the same time period, illustrating the kind of leverage that can be achieved with options.

Long calls lock in the price where a stock can be purchased, gaining with a rally and providing leverage to the underlying shares. The contracts can quickly lose value if the stock stalls or pulls back but also carry less risk than owning the shares themselves.

CLDR is currently up 16.22% to $11.75 today. The company is reportedly exploring a sale after receiving takeover interest per a Bloomberg report.