$JEF bulls score at highs

Option traders are scoring huge gains today on bullish positions in Jefferies Financial Group (JEF).

On Jan. 26, Market Rebellion’s Unusual Activity Service found that 2,000 June $30 calls were bought for $0.55 to $0.65 with shares at $24.26. This was clearly fresh buying, as open interest in the strike before the activity appeared was just 1,332.

Those calls have traded for as much as $3.50 today, at least 5 times their purchase prices. The stock rallied 31.04% in the same time period, a large move but nowhere near that of its options on a relative basis.

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.

JEF was last up 3.19% today at $31.52, setting multi-year highs this session for the financial services company.