Calls rack up quick gains in $MA

It took less than a week for option traders to nearly triple their money in Mastercard.

On April 26, Investitute’s tracking systems detected the purchase of 2,000 May $182.50 calls for $2.41 to $2.52 as part of a bullish spread with shares at $177.17. This was clearly a new position, volume was far above the strike’s open interest of 243 contracts.

Those calls traded up to $6.70 today, almost 3 times their initial purchase price. The stock rose 6.1% in the same time frame, showing how quickly options can far outpace gains in their underling 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.

MA was up 3.09% to $185.82 today. The payment-processing company topped projections on the top and bottom lines before the market opened this morning.