$FB option bulls score at highs

Option traders are posting large gains today on bullish positions opened in Facebook (FB) nearly three months ago.

On Apr. 29, Market Rebellion’s Unusual Activity programs detected the purchase 2,000 August $360 calls for $9.85 to $10.03 as part of a bullish roll with shares at $324.65. The volume was well above the contract’s previous open interest of 286 which indicated that this was a new position.

Those calls have traded up to $23.50 today, at least double their purchase prices. The stock rose 15.59% at the same time, showing how quickly options can far outperform their underlying shares.

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.

FB was last up 5.4% at $37.14 in late afternoon trade, setting new highs this session ahead of its next expected earnings report after the close on Jul. 28.