Calls double overnight in $SE

Option traders were posting sizable profits in Sea Limited today, only one session after opening bullish positions in the name.

Just yesterday, Investitute’s proprietary programs flagged the purchase of 9,500 November $15 calls for $0.50 to $0.55 with shares at $12.67. These were clearly new positions, as volume was far above the strike’s open interest of 1,035 contracts.

Those calls traded up to $1.05 today, twice their purchase prices. The stock rose 11.13% at the same time, showing 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.

SE jumped 5.14% today to close at $13.91. The Singapore-based e-commerce and entertainment company bounced off its lowest levels in nearly four months yesterday as Asian stocks rebounded.