$PLBY bulls pin up gains

Option traders are pinning up big profits in Playboy Enterprises (PLBY) this afternoon.

On Mar. 19, Market Rebellion’s Unusual Options Activity service showed that 3,000 April $20 calls were purchased for $1.15 to $2.65 with shares at $17.15, above the previous open interest of just 954 contracts.

Those calls sold for $6.70 today, at least 2.5 times their purchase prices. The stock rose 55.1% in the same time period, illustrating the kind of leverage that can be achieved with options.

Long calls lock in the price where a stock can be purchased, gaining with a rally and providing leverage to the underlying shares. The contracts can quickly lose value if the stock stalls or pulls back but also carry less risk than owning the shares themselves.

PLBY is lower this session, last trading at $25.16, down 1.33%. Roth Capital raised its price target on the shares to $35 from $28 on Wednesday.