Call prices surge sixfold in $FTNT

Fortinet rallied sharply on a strong earnings report this week, yielding huge gains on bullish option positions opened more than three months ago.

On April 30, Investitute’s market scanners identified the purchase of 2,100 September $60 calls for $2.55 to $2.90 with shares at $55.34. This was clearly fresh buying, as open interest in the strike was only 430 contracts before that session began.

Those calls traded up to $15.70 this morning, more than 6 times their initial purchase price. The stock surged 34.97% in the same time period, underscoring how options can far outperform their underlying shares.

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.

FTNT reached at 52-week high of $75.64 before pulling back to close at $73.63, off 0.18% on the session. The cybersecurity company topped quarterly estimates and raised its outlook after the market closed Wednesday.