Call buyers rack up gains in $LFGR

Bullish option traders have doubled their money in Leaf Group.

On Feb. 12, Investitute’s market scanners found that 7,117 August 6 calls were bought for 2.05 with shares at $7.45. This was clearly fresh buying, as there was no open interest in the strike before the trades occurred.

Those calls sold for as much as $4.50 today, more than twice their purchase price. The stock surged 40.9% in the same time frame, a huge move but still well below 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.

LFGR jumped 6.93% today to close at $10.80. The consumer-health media company rallied sharply after quarterly results early last month.