Calls book large win in $EXPE

Bullish option traders doubled their money in Expedia today.

On Jan. 9, Investitute’s proprietary programs flagged the purchase of 5,000 June $120 calls for $7.70 and $7.80 as part of a bullish spread wish shares at $114.48. This was clearly a new position, as open interest in the strike was a mere 70 contracts before the activity appeared.

Those calls traded for as much as $17.30 today, more than twice their purchase prices. The stock rose 16.13% 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.

EXPE jumped to $135 this morning before pulling back with the broader market to close at $130.80, up 2.29% on the session. The online travel service exceeded earnings and revenue estimates after the market closed yesterday.