Call buyers score big in $AKAM

Bullish option traders have tripled their money in Akamai.

On May 9, Investitute’s tracking systems detected the purchase of 2,500 May $76.50 calls for $0.40 to $0.50 with shares at $74. Open interest in the strike was a mere 12 contracts before that session began, showing that this was fresh buying. Investitute co-founder Jon Najarian cited the unusual activity at that time on CNBC’s “Halftime Report.”

These calls traded for $1.45 today, more than 3.5 times their original purchase price. The stock rose 4.4% at the same time, 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.

AKAM was up 0.51% to $76.69 today. The cloud-content service beat quarterly estimates on the top and bottom lines at the end of April.