$DBX bulls triple their money

Dropbox (DBX) bulls have made significant gains over the span of the past month.

On Aug. 15, Market Rebellion’s proprietary programs flagged the purchase of 4,800 September $18 calls for $0.70 to $0.80 as part of a bullish spread with shares at $17.49. This was clearly fresh buying, as open interest in the strike was only 1,048 contracts before that session began.

Those calls have traded for as much as $2.70 so far today, more than 3.5 times their average purchase price. The stock rose 18.01% in the same time frame, illustrating how options can far pace gains in 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.

DBX is currently higher on the session by 1.72% to $20.75 . The file hosting service company’s stock is trading just below its 50-day simple moving average (SMA), which it has not been above since the beginning of August.