$CIEN bulls score big again

Option traders posted enormous profits in Ciena (CIEN) today for the second session in a row.

On Dec. 11, Market Rebellion’s Unusual Activity Service found that 2,300 Weekly $37.50 calls expiring this afternoon were bought for $0.82 as part of a bullish spread with shares at $35.27. This was clearly a new position, as open interest in the strike was only 292 contracts before the trade occurred.

Those calls sold for as much as $6.15 today, 7.5 times their purchase price. The stock rose 23.59% in the same time frame, underscoring how quickly options can far outperform their underlying shares.

It is the second winning trade in the name posted on Market Rebellion 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.

CIEN spiked to $43.96 this morning before pulling back with the broader market and is now off 0.87% to $42.25 on the session. The network-technology company missed quarterly expectations yesterday but issued a strong outlook that sent shares spiking higher.