$NTNX call prices jump fourfold

Nutanix has been rallying on strong quarterly numbers, handing huge profits to bullish option traders.

On Feb. 20, Investitute’s proprietary programs flagged the purchase of 2,400 March $35 calls for $2.15 to $2.75 with shares at $35.03. This was clearly fresh buying, as volume was well above the strike’s open interest of 1,032 contracts.

Those calls traded for $9.50 today, more than 4 times their original purchase price. The stock rose 26.8% in the same time frame, 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.

NTNX popped 5% to $44.13 today. The cloud-software company beat quarterly estimates on the top and bottom lines late last week.