Call prices soar 30-fold in $FIT

Bullish option traders racked up enormous gains in Fitbit today.

On May 4, Investitute’s tracking systems detected the purchase of 3,300 June $6 calls for $0.05 and $0.06 with shares at $4.97. These were clearly new positions, as open interest in the strike was only 718 contracts before the trades occurred.

Those calls sold for $1.57 this afternoon, more than 30 times its initial purchase price. The stock surged 52.3% in the same time period, a huge move but still nowhere near that of its options on a relative basis.

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.

FIT jumped 14.72% to $7.28 today. The consumer health-device maker spiked higher after Citron Research said the stock could reach $15 by the end of 2018. The company also announced that its Fitbit Ace wearable for children would be available globally.