$ETWO call buyers score big

Bullish option positions opened in E2open Parent Holdings (ETWO) are returning big gains for upside traders as shares reach new highs today.

Market Rebellion’s Unusual Activity Service found unusual call activity in the name in recent months:

–On Mar. 31, 2,800 July $12.50 calls were purchased for $0.90 to $0.95 above open interest of 1,504 contracts with shares at $10.09.
–On Apr. 28, 4,900 June $12.50 calls were purchased for $0.40 to $0.45 above open interest of 122 contracts with shares at $10.46.

Those calls have traded for up to $2.30 and $1.95 today, more than 2 and 4 times their respective purchase prices. The stock rose by as much as 43.41% in the same time frame, underscoring the kind of leverage that can be obtained with options.

Long calls lock in the price where the 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.

ETWO was last higher by 2.62% today at $13.34. The supply chain software developer announced today that it would acquire BluJay Solutions in a $1.7 billion deal.