Call buyers $NET big profits

Call buyers $NET big profits


Bullish option traders are netting big profits in their upside positions on Cloudflare (NET) today.

On Feb. 8, Market Rebellion’s Unusual Activity scanners identified the purchase of 3,000 February $90 calls for $3.00 to $4.50 with shares at $83.33. This was clearly a new position, as volume was well above the strike’s previous open interest of 2,417 contracts.

Those calls have traded for as much as $26.70 today, a 493.33% return, while the stock rose 36.83% at the same time, showing how 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.

NET was last higher by 19.21% at $107.66.

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