Calls score 9-fold gains in $SE

Option traders are swimming in profits from Sea Limited.

On Feb. 25, Investitute’s proprietary programs flagged the purchase of 10,000 18April $17.50 calls in one print for $0.70 with shares at $15.96. This was clearly a new position, as open interest in the strike was a mere 60 contracts before the activity appeared. Investitute co-founder Pete Najarian updated the trade on CNBC’s “Halftime Report” yesterday.

Those calls traded for $6.20 this afternoon, about 9 times their purchase price. The stock surged 47.37% in the same time frame, a huge move but nowhere near that of its options on a relative basis. It is the third 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.

SE jumped another 7.91% today to close at $23.20. The Singapore-based digital entertainment, e-commerce, and financial-services company has spiked higher since reporting earnings after the close on Feb. 26.