$NLSN bulls score on deal talk

Option traders nearly tripled their money in Nielsen today.

On July 27, Investitute’s proprietary programs flagged the purchase of 3,000 November $24 calls for $0.90 with shares at $22.46. There was no open interest in the strike before the trade occurred, showing that it was a new position.

Those calls traded for $2.48 this morning, nearly 3 times their purchase price. The stock rose 24.18% in the same time period, a large move but 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.

NLSN jumped 12.06% to $24.62. Nielsen rallied after activist investor Elliott Management announced this morning that it had taken a 5.1% stake in the media-metrics company and would urge its sale.