$GRUB bulls fill up on more profits

Option traders are racking up more exponential profits today on upside positions opened in GrubHub (GRUB) towards the end of last week.

On May 7, Market Rebellion’s Unusual Activity programs found that 2,300 June $55 calls were bought for $0.95 with shares at $44.31. Open interest in the strike was only 1,327 contracts before the trades occurred, showing that these were new positions.

Those calls traded for as much as $13.20 today, more than 13 times their purchase price. The stock gained 46.33% at the same time, a huge move but still nowhere near that of its options on a relative basis.

It is the second winning trade in the name to be posted by Market Rebellion in recent weeks.

Long calls lock in the price where a 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.

GRUB ended up 29.07% to $60.39 today. The food-delivery service’s stock ratcheted higher after news that Uber (UBER) had made an offer to acquire the company.