Sky-high return in Salesforce.com

A highly bullish strategy has turned enormous profits thanks to Salesforce.com’s earnings report this week.

Back on March 6, Investitute’s proprietary programs showed that 8,191 May $90 calls were purchased for $0.51 while 8,191 May 75 puts were sold for $0.44 against open interest of 4,415 contracts, for a total cost of $0.07. The stock was trading at $82.01

Those May $90 calls traded up to $1.50 this morning with shares at $90.89, while the May $75 puts fell to zero. Both contracts expired at the end of today’s session, resulting in a gain of more than 2,000 percent from the initial $0.07 outlay.

Such combination trades are particularly bullish because a rally boosts the price of the long calls while decreasing the value of the puts that were sold. Calls lock in the price where the stock can be purchased, gaining with a rally and providing leverage to the underlying shares with limited risk. Puts do just the opposite and increase when a stock drops, as traders use them either as an outright bearish bet or a hedge on a long position.

CRM slipped 0.4 percent today to close at $87.40 after hitting an all-time high of $91 just after the opening bell. The cloud-software company exceeded quarterly estimates on the top and bottom lines after yesterday’s close.