$SNCR call buyers hit home run

Synchronoss Technologies soared on news of buying negotiations today, and option positions rocketed even higher.

On Monday, Investitute’s proprietary programs showed that 2,900 October $12.50 calls were purchased for $0.30 to $0.41 against open interest of 348 contracts. Stock 11.00.

Those calls traded for $2.28 today, more than 7 times its original price. The stock rose 31 percent in the same time frame, a strong move but one that was still far below that of its options on a relative basis.

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.

SNCR spiked higher by 32 percent today to close at $14.15. The cloud-software company said it has resumed sale talks with Siris Capital Partners after negotiations collapsed last month.