$GDI calls prices soar 5-fold

Option traders collected exponential gains today on bullish positions opened in Gardner Denver (GDI) only three sessions earlier.

On Oct. 10, Market Rebellion’s proprietary programs flagged the purchase of 3,000 November $30 calls for $0.26–almost all of them in one print of 2,900–with shares at $27.81. This was clearly fresh buying, as open interest in the strike was a mere 1 contract before the trade occurred.

Those calls sold for $1.25 today, about 5 times their purchase price. The stock rose 4.57% in the same time frame, underscoring 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.

GDI reached a session high of $29.53 earlier this afternoon but has pulled back to $29.06 into the closing bell, down 1.72% on the day. The industrial equipment maker has not announced a date for its quarterly results but is expected to report earnings toward the end of next week.