$PTC call prices triple

PTC (PTC) set new highs this session, delivering large profits to upside option traders.

Back on Aug. 26, Market Rebellion’s Unusual Activity Service identified the purchase of 3,400 January $90 calls for $9.10 to $9.80 with shares at $89.48. This was clearly fresh buying, as open interest in the strike was just 34 contracts before the activity appeared.

Those calls traded for as much as $29.81 today, at least 3 times their purchase prices. The stock rose 33.82% in the same time frame, illustrating the kind of leverage that can be achieved with options.

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.

PTC was up 1.48% at $120.14 at the close today, setting new highs this session. The software company’s price target was raised to $132 from $120 at Deutsche Bank this morning.