$FEYE bulls turn quick gains

It took less than a week for option traders to double their money on upside positions in FireEye (FEYE).

On Oct. 18, Market Rebellion’s tracking systems found that 9,000 Weekly $16 calls expiring on Nov. 1 were bought for $0.26 to $0.38 with shares at $14.97. This was clearly fresh buying, as open interest in the strike was only 243 contracts before that session began.

Those calls traded for as much as $0.69 today, more than twice their average purchase price. The stock rose 5.08% in the same time frame, showing how quickly options can far outperform their underlying shares.

It is the third winning trade in the name posted on Market Rebellion in as many weeks.

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.

FEYE is up 1.03% to $15.76 this morning. The cybersecurity company, long the subject of deal speculation, is scheduled to report earnings after the market close on Oct. 29.