$CIEN bulls quadruple money

Option traders collected exponential profits in Ciena today, thanks to strong quarterly results.

On June 15, Investitute’s proprietary programs flagged the purchase of 2,500 September $25 calls $1.54 to $1.60 as part of a bullish roll with shares at $24.85. This was clearly a new position, as volume was well above the strike’s open interest of 2,009 contracts.

Those calls sold for $7 today, more than 4 times their purchase prices. The stock rose 28.7% in the same time period, a large move but nowhere near that of its options.

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.

CIEN rose 2.83% to $31.58. The networking-equipment maker topped earnings and revenue expectations yesterday morning.