A bouquet of profits for $FLWS bulls

1-800-Flowers (FLWS) option bulls made were delivered a bouquet of big profits today.

On Jan. 20, Market Rebellion’s Unusual Activity Service found that 2,800 February $32 calls were bought for $2.45 to $2.95 with shares at $31.53. This was clearly fresh buying, as open interest was only 407 contracts before the activity appeared.

Those calls traded for $7.42 this session, at least 2.5 times their purchase prices. The stock rose 24.52% at the same time, showing how options can far outperform gains in their underlying shares.

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.

FLWS rallied to open at $39.61 but had pulled back by the end of the day to close at $32.13, down by 11.61%. The floral and foods gift retailer and distribution company topped earnings estimates before the open today.