$CSCO calls jump threefold

Bullish option traders have gotten some love from a Valentine’s Day trade in Cisco Systems.

On Feb. 14, Investitute’s market scanners found that 4,000 Weekly $50 calls expiring on March 8 were purchased in one print for $0.50 with shares at $48.73. This was clearly a new position, as open interest in the strike was only 325 contracts before that trade occurred.

Those calls sold for as much as $1.58 just before today’s closing bell, more than 3 times their purchase price. The stock rose 5.44% in the same time frame, showing how quickly options can far outperform their underlying 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.

CSCO closed higher by 0.77% to $51.18 today after reaching a 52-week high of $51.41 in the last half-hour of trading. The networking giant has rallied sharply this year on strong quarterly results and an emphasis on 5G technology.