$DBX call prices surge 5-fold

Option traders are celebrating fast profits on bullish positions opened in Dropbox (DBX) on Friday.

On Dec. 11, Market Rebellion’s Unusual Activity Service flagged the purchase of 3,300 December $22 calls for $0.27 to $0.43 with shares at $21.73. Open interest in the strike was only 2,703 contracts before that session began, showing that this was fresh buying.

Those calls traded for as much as $2.19 today, over 5 times their purchase prices. The stock surged 11.04% in the same time period, underscoring how 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.

DBX was up to a new 52-Week high of $24.14 after a gap-open higher but pulled back by the close to end the day at $23.32, still up by 3.69%. The cloud-based collaboration platform beat earnings and revenue estimates on Dec. 1.