$DDOG bulls triple money

Datadog (DDOG) is trading at new highs today after earnings, handing profits to bullish option positions opened at the end of last week.

This past Friday, Jul. 30, Market Rebellion’s Unusual Activity Service found that 4,800 August $112 calls were bought for $5.15 to $6.00 above open interest of 180 contracts with shares at $110.57.

Those calls have traded for up to $23.02 so far today, at least 3.5 times their purchase prices. The stock rose 21.9% in the same time frame, showing how quickly options can far outpace 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.

DDOG was last up 16.31% to $133.68 today. The cloud monitoring service topped quarterly earnings expectations before the opening bell today.