Calls quadruple in $GDDY

Bullish option traders cashed in big profits in GoDaddy (GDDY) today.

On Nov. 6, Market Rebellion’s tracking systems detected the purchase of 3,400 December $67.50 calls for $1.10 to $1.70 with shares at $62.12. This was clearly fresh buying, as open interest in the strike was only 687 contracts before that session began.

Those calls sold for as much as $4.51 today, more than 4 times their initial purchase price. The stock rose 13.2% in the same time frame, underscoring how quickly 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.

GDDY reached a session high of $70.55 this morning but pulled back to close at $68.99, off a penny on the day. The small-business cloud company topped earnings expectations after the market closed on Nov. 6, hours after the call activity appeared.