$CIEN calls triple in one session

Option traders who opened bullish positions in Ciena last Friday have already chalked up impressive gains.

At the end of last week, Investitute’s market scanners found that 3,000 Weekly $25.50 calls expiring this Friday were purchased for $0.19 and $0.20 as part of a bullish roll with shares at $25.07. This was clearly fresh buying, as open interest in the strike was only 105 contracts before the activity appeared.

Those calls sold for $0.69 today, more than 3 times their purchase prices. The stock rose 3.27% at the same time, illustrating the kind of leverage that can be achieved quickly with options.

Long calls lock in the price where a stock can be purchased, gaining with a rally and providing leverage to the underlying shares. The contracts can quickly lose value if the stock stalls or pulls back but also carry less risk than owning the shares themselves.

CIEN was up 3.34% today to close at $25.70. The networking-equipment maker rallied this morning after Morgan Stanley upgraded the name to “overweight” from “equal weight” and raised its price target to $30 from $29.