$FDC call prices surge fivefold

First Data is trading near 52-week highs after strong quarterly results last week, yielding exponential profits on bullish option positions.

On April 10, Investitute’s tracking systems detected the purchase of 8,100 January $17 calls for $1.45 to $1.50 with shares at $15.55. Volume was well above the strike’s open interest of 6,508 contracts, indicating that this was fresh buying.

Those calls traded for $7.40 today, 5 times their initial purchase price prices. The stock surged 54.8% in the same time period, a huge move but still nowhere near that of its options. Investitute co-founder Pete Najarian cited further buying in October calls last Thursday on CNBC’s “Halftime Report.”

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.

FDC was up 0.67% to $24.10. The electronic-payment company blew past earnings and revenues estimates on July 30.