Etsy Inc. (ETSY) Call Buyers Lock In Massive Gains After Unusual Activity Spike

Etsy Inc. (ETSY) call traders scored fast gains following a notable surge in bullish options flow last week.

On May. 30, our Unusual Activity service flagged aggressive buying in the June $56 calls, with 5,000 contracts trading for $1.29 to $1.33 — well above the prior open interest of just 253 contracts. At the time, ETSY shares were trading around $54.05.

By today, those same calls traded as high as $6.30, handing traders up to a 373.7% return. In contrast, ETSY stock gained 14.3% over the same period, underscoring how short-term call options can vastly outperform their underlying shares.

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

ETSY was last up 1.92% today, trading at $61.35.