$MULE calls spike 8-fold in a day

MuleSoft handed huge gains to bullish option traders today after just 24 hours.

Yesterday Investitute’s market scanners identified the purchase of 1,400 March $30 calls for $0.25 to $0.55 with shares at $25.95. Volume was above the strike’s open interest, indicating that this was fresh buying.

Those calls traded sold for $2.15 today, more than 8.5 times their original purchase price. The stock rose 18.4% 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.

MULE surged 17.91% to $30.81 today. The cloud-software company topped revenue projections after the market closed yesterday.