$MXWL calls prices soar 7-fold

Bullish option traders reaped huge profits in Maxwell Technologies today.

On Dec. 20, Investitute’s proprietary programs flagged the purchase of 1,369 June $3 calls for $0.23 as part of a bullish roll with shares at $2.02. Open interest in the strike was only 590 contracts before that session began, showing that this was a new position.

Those calls traded up to $1.70 this afternoon, more than 7 times their purchase price. The stock rocketed 127% in the same time period, a gigantic move but still nowhere near that of its options.

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.

MXWL rocketed 49.51% to $4.59 today. Tesla (TSLA) announced this morning that it is acquiring the battery-technology company for $218 million.