$ADBE bulls post astronomic gains

Upside option positions went through the roof today as Adobe Systems shot to all-time highs.

On Sept. 29, Investitute’s tracking systems detected the purchase of 3,200 October $152.50 calls for $0.87 to $0.94 with shares at $147.68. These were clearly new positions, as volume was well above the strike’s open interest of 1,935 contracts.

Today those calls traded up to $19.08 just before the closing bell, more than 20 times their original purchase price. The stock rose 16.2 percent in the same time period, an impressive move but nowhere near the gains in 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.

ADBE soared 18.73 percent to close at $171.73 today, just off a new lifetime high of $172.15 reached earlier in the session. The software maker spiked higher after beating quarterly results and raising its outlook last night.