Call prices double in $PS

Bullish option positions in Pluralsight (PS) are yielding large returns ahead of quarterly results this afternoon.

On Dec. 11, Market Rebellion’s Unusual Activity Service detected the purchase of 2,400 April $15 calls for $2.80 as part of a bullish spread with shares at $15.94. Open interest in the strike was only 298 contracts before the trade occurred, showing that this was a new position.

Those calls are marked at $5.90 this afternoon, more than twice their purchase price. The stock rose 29.05% 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.

PS is up 3.56% to $20.63 this afternoon. The cloud tools and education platform will report earnings after the market closes today.