Calls double overnight in $RNG

Bullish option traders dialed up some fast money in RingCentral today.

Just yesterday, Investitute’s tracking systems found that 1,500 August $85 calls were purchased for $2.20 as part of a bullish roll with shares at $81.55. Open interest in the strike was only 518 contracts before the trade occurred, showing that this was a new position.

Those calls traded for $5.50 this morning, 2.5 times their purchase price. The stock rose 10.3% at the same time, illustrating how quickly options can far outpace gains in 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.

RNG jumped 6.88% to $87 today. The business-communications software company beat quarterly estimates on the top and bottom lines after the market closed yesterday.