$NET call prices rise for bulls

Bullish option traders are cashing in on big gains on their upside positions in Cloudflare (NET) today.

On Oct. 12, Market Rebellion’s Unusual Activity scanners identified the purchase of 4,000 October $50 calls expiring tomorrow for $0.50 to $3.90 with shares at $47.34. This was clearly a new position, as volume was well above the strike’s previous open interest of 2,031 contracts.

Those calls have traded for as much as $7.82 so far today, more than double their purchase prices. The stock rose 22.31% in the same time frame, a large move in such a short time frame but nothing like 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.

NET was last lower on the session by 6.54% at $57.48, retracing from a new all-time high of $61.67 made yesterday by the web infrastructure and security company.