$ETSY call prices rocket 19-fold

Option traders cashed in enormous profits today on bullish positions in Etsy that expire tomorrow.

On Feb. 1, Investitute’s proprietary programs flagged the purchase of 5,000 June $22.50 calls for $1.15 as part of a bullish spread with shares at $19.15. This was clearly fresh buying, as open interest in the strike was only 453 contracts before the trade occurred.

Those calls sold for $21.91 today, 19 times their purchase price. The stock soared 132% in the same time period, a huge move but still nowhere near that of its options 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.

ETSY reached a lifetime high of $44.78 this morning before closing at $41.65, up 26.25% on the day. The online crafts marketplace topped estimates and raised guidance before the session opened, citing higher transaction fees.