$MLHR calls furnish gains

Bullish option traders have made big profits in Herman Miller (MLHR) after its earnings report last night.

On Jul. 10, Market Rebellion’s Unusual Activity Scanners showed that 4,145 February $25 calls were bought for $2.44 to $2.73 as part of a bullish spread above open interest of 25 contracts with shares at $20.71.

Those calls surged to $11.43 today, well over 4 times their purchase prices. The stock rose 67.46% at the same time, showing how quickly options can far outperform their underlying shares 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.

MLHR was last up 31.35% at $34.00. The furniture maker topped earnings expectations on its top and bottom lines after the close of trade yesterday.