$TMUS bulls turn huge gains overnight

Option traders have quadrupled their money only one session after opening upside positions in T-Mobile.

Just yesterday, Investitute’s tracking systems detected the purchase of 20,000 October $67.50 calls for $0.27 to $0.35 with shares at $61.01. There was no open interest in the strike before the activity appeared, showing that this was fresh buying.

Today those calls traded as high as $1.27, more than four times their original price. The stock was up 7.2 percent at the same time, underscoring how quickly options can far outpace gains in their underlying shares. The trade was highlighted by Investitute co-founder Pete Najarian on CNBC’s “Halftime Report” yesterday.

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.

TMUS jumped 5.86 percent to $65.42 today. The wireless carrier rallied sharply on reports that it is in merger talks with rival Sprint.