$DDOG option bulls score big

Datadog (DDOG) is trading up today after earnings, handing big profits to bullish option positions.

On Jan. 28, Market Rebellion’s Unusual Activity Service found that 4,000 June $140 calls were bought as part of a bullish spread for $16.50 above open interest of 261 contracts with shares at $128.64.

Those calls have traded for up to $50.05 so far today, more than 3 times their purchase price. The stock rose 41.67% 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 13.61% to $176.66 today.