$DDOG bulls bag another win

Datadog (DDOG) continued to trade at all-time-highs today, handing fast profits to bullish option positions opened yesterday morning.

Yesterday morning on May 12, Market Rebellion’s Unusual Activity Service found that 3,800 May $65 calls were bought $0.80 to $3.00 with shares at $65.60. This was clearly a new position, as open interest in the strike before that session began was only 357 contracts.

Those calls traded for $7.50 today, at least 2.5 times their purchase prices. The stock rose 9.62% in the same time frame, showing how quickly options can far outpace gains in their underlying shares.

It is the second winning trade in the name to be posted on Market Rebellion in as many sessions.

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.

DDOG was up 1.64% to $69.99 today after a new all-time-high print intraday of $72.15. The cloud monitoring service beat earnings expectations on its top and bottom lines after the market closed Monday, May 11, while also guiding the quarter and fiscal year higher.