$CSCO calls rocket fourfold

Bullish option traders have quadrupled their money in upside call positions on Cisco Systems.

On Feb. 25, Investitute’s market scanners found that 11,500 May $55 calls were purchased, as part of a bullish roll, in one print for $0.41 with shares at $50.86. This was clearly a new position, as open interest in the strike was only 514 contracts before that trade occurred.

Those calls traded for as much as $1.83 just before today’s closing bell, more than 4 times their purchase price. The stock rose 8.87% in the same time frame, a substantial move but one which pales in comparison to 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.

CSCO closed higher by 0.56% to $55.29 today, just off a new 52-Week high made earlier in the session at $55.41. The technology conglomerate has risen sharply all year, helped in part by an earnings beat delivered on Feb. 13.