$PLNT bulls pump up gains

It took less than three sessions for option traders to quadruple their money in Planet Fitness.

On Wednesday, Investitute’s proprietary programs flagged the purchase of 4,000 June $40 calls for $0.45 to $0.80 with shares at $38.13. This was clearly fresh buying, as open interest in the strike was only 438 contracts before the activity appeared.

Those calls traded as high as $1.90 today, more than 4 times their initial purchase price. The stock rose 7.2% in the same time frame, showing how quickly options can outperform their underlying shares.

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.

PLNT was up 1.91% to $40.49 today. The fitness-center chain topped quarterly expectations on the top and bottom lines earlier this week.