Call prices take flight in $TWTR

Bullish option traders turned significant profits in Twitter today.

On Dec. 11, Investitute’s tracking systems found that 6,900 Weekly $20 calls expiring this Friday were purchased for $1.42 to $1.77. These were clearly new positions, as open interest in the strike was only 649 contracts before that session began.

Those calls traded up to $4.73 today, more than 3 times their original purchase price. The stock rose 14.4 percent in the same time frame, underscoring how options can far outperform their underlying shares. It was the second winning trade in Twitter posed on Investitute in the last week.

Long puts lock in the price where a stock can be sold no matter how far it might drop, gaining value in a selloff with the potential for significant leverage. The contracts can be purchased either as an outright bearish bet or a hedge on a long-stock position.

TWTR jumped 11.02 percent to $24.68 today. JP Morgan upgraded the social-media name to “overweight” from “neutral” this morning and raised its price target to $27 from $20.