$BGC calls rocket into stratosphere

Bullish traders collected monstrous gains on option positions opened in General Cable just one week ago.

Last Tuesday, Investitute’s tracking systems detected the purchase of 2,490 December 22 calls for $0.20 to $0.30 with shares at $21.30. These were clearly new positions, as open interest in the strike was only 890 contracts before the trades occurred.

Those calls sold for $7.30 this morning, more than 36 times their original purchase price. The stock surged 37.6 percent in the same time frame, illustrating how quickly options can far outperform 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.

BGC soared 35.09 percent to $29.45. The cable manufacturer spiked higher this morning after Italy’s Prysmian announced plans to purchase Kentucky-based company for $3 billion.