$EBAY calls double overnight

Option traders who opened bullish positions in eBay yesterday collected sizable profits just 24 hours later.

Investitute’s tracking systems found yesterday that 3,000 Weekly $43 calls expiring this afternoon were purchased at the same second for $0.39 with shares at $43.18. This was clearly fresh buying, as volume was well above the strike’s open interest of 1,443 contracts.

Those calls sold for $0.73 today, almost doubling in price just 24 hours later. The stock rose just 1.3% at the same time, showing the kind of leverage that can be achieved with options.

Long calls lock in the price where a stock can be purchased, gaining with a rally and providing leverage to the underlying shares. The contracts can quickly lose value if the stock stalls or pulls back but also carry less risk than owning the shares themselves.

EBAY was up 1.98% today to close at $43.68. Analysts have raised estimates for the online-auction giant in recent months, citing improving metrics.