$HPE call prices rocket sixfold

Bullish option traders scored astronomic gains in Hewlett Packard Enterprise today thanks to strong quarterly results.

On Nov. 20, Investitute’s market scanners identified the purchase of 2,700 May $16 calls in one print for $0.40 with shares at $14.05. This was clearly a new position, as open interest in the strike was a mere 42 contracts before the trade occurred.

Those calls traded for as much as $2.40 today, 6 times times purchase price. The stock rallied 28.9% in the same time period, a large move but nowhere near that of its options.

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.

HPE jumped 10.54% to $18.14 today. The business-software company beat earnings estimates after the market closed yesterday.