$EIGI bulls browse for gains

Bullish option traders are browsing for fast gains for their call positions in Endurance International Group (EIGI) today.

On Oct. 28, Market Rebellion’s Unusual Activity Service flagged the purchase of 3,400 November $7.50 calls for $0.25 to $0.33 with shares at $6.24. This was clearly fresh buying, as open interest in the strike was only 1,570 contracts before that session began.

Those calls have traded up to $2.05 today, over 6 times their purchase prices. The stock rose 51.28% in the same time, underscoring how quickly options can far outpace gains in their underlying shares on a relative basis.

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.

EIGI is up 61.10% to $9.36 this session. The web hosting company is to be acquired by Clearlake for $9.50 per share, announced this morning.