$SQ bulls hit jackpot in two days

It took just 48 hours for traders to draw exponential returs on upside option positions in Square.

On Wednesday, Investitute’s market scanners identified the purchase of 2,200 November $42 calls for $0.35 to $0.80 with shares at $41.69. These were clearly new positions, as open interest in the strike was only 476 contracts before the trades occurred. Investitute co-founder Jon Najarian outlined positions that traders were taking ahead of Square’s earnings report last week on CNBC.

Those calls sold for $3.21 today, more than 9 times their original purchase price. The stock rose 8.3 percent at the same time, showing how quickly options can far outperform their underlying shares.

SQ jumped 5.44 percent today to close at $44.18. Evercore upgraded the electronic-payment service to “outperform” from “in line” and raised its price target to $51 from $26 after the company confirmed that it will allow Bitcoin to be used on its app.