Call prices double in $ZAYO

Bullish option traders are cashing in again on Zayo Group.

On Nov. 16, Investitute’s tracking systems cited the purchase of 4,000 March $27.50 calls in one print for $0.95 with shares at $23.56. This was clearly a new position, as open interest in the strike was a mere 91 contracts before the trade occurred.

Those calls traded for as much as $2.20 this morning, more than twice their purchase price. The stock rose 12.86% at the same time, illustrating the kind of leverage that can be achieved with options. It was the second winning trade in the name posted on Investitute in the last two weeks.

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.

ZAYO climbed to $26.90 early today but pulled back with the rest of the market to close at $25.12, down 5.81% on the session. Last month Bloomberg reported that investors including Blackstone and Stonepeak Partners were considering a possible bid for the network-technology firm.