$LPSN calls double overnight

Option traders posted quick profits today on bullish positions opened in LivePerson only one session earlier.

Just yesterday, Investitute’s tracking systems detected the purchase of 2,700 18April $30 calls $0.30 to $0.55 with shares at $26.71. This was clearly fresh buying, as open interest in the strike was only 400 contracts before the trades occurred. Investitute co-founder Jon Najarian cited the unusual activity at that time on CNBC’s “Halftime Report.”

Those calls traded for as much as $1.12 just before today’s closing bell, more than twice their purchase prices. The stock rose 6.07% in the same time, illustrating the kind of leverage that can be achieved with options.

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.

LPSN was up 2.88% to $28.24 today. Evercore initiated the consumer and business cloud-communications company with an “outperform” rating and a $34 price target yesterday, and Barclays started coverage of the name with an “overweight” rating and a $35 target this morning.