$LIVN calls double on earnings

Option traders posted large profits today on bullish positions opened in LivaNova just one week earlier.

On July 24, Investitute’s tracking systems detected the purchase of 1,500 August $110 calls for $5.60 as part of a bullish roll with shares at $110.48. This was clearly a new position, as volume was well above the strike’s open interest of 270 contracts.

Those calls traded for $10 today, almost twice their purchase price. The stock rose 7.98% at the same time, showing how quickly options can far outpace gains in 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.

LIVN jumped 10.41% to $121.60 today. The medical device company reported earnings this morning beating on both the top and bottom lines while maintaining guidance through the rest of its fiscal year.