Option traders cash in on $SE

Bullish option traders cashed in on Sea Limited (SE) today as the stock made a new all-time-high.

On May 22, Investitute’s tracking systems identified the purchase of 2,500 June $31 calls, expiring today, in one print for $1.50 with shares at $30.28. This was clearly a new position, as open interest in the strike was a mere 276 contracts before the trade occurred.

Those calls traded for $3.60 today, more than twice their purchase price. The stock rose 14.17% in the same time, showing how options can far outperform their underlying shares.

Investitute co-founder Jon Najarian cited fresh unusual activity in the name on CNBC’s “Halftime Report” today.

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.

SE made a new all-time-high today of $34.75 and closed up by 6.78% to $34.49. On June 13, the Singapore-based digital entertainment, e-commerce, and financial-services company was initiated by JPMorgan with an Overweight rating and $36 price target.