Calls keep racking up $FDC gains

FDC saw at least five large bullish option trades last month, and they are all paying off big time now.

In the last of those entries on our Activity Log, on Dec. 17, Investitute’s proprietary programs flagged the purchase of 13,276 March $17 calls for $1.50 as part of a bullish spread with shares at $16.50. This was clearly a new position, as open interest in the strike was only 233 contracts before that session began.

Those calls sold for $5.11 this morning, nearly 3.5 times their purchase price. The stock rallied 33.27% in the same time period, a huge move but still nowhere near that of its options. It was the second winning trade in the name posted on Investitute in as many days.

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.

FDC was up 3.15% to $21.91 today. Yesterday morning Fiserv announced that it is acquiring the e-commerce payment company for $22 billion.