$RLGY call prices spike 6-fold

Option traders are posting exponential gains on upside positions in Realogy (RLGY) today.

On Oct. 7, Market Rebellion’s proprietary programs flagged the purchase of 3,500 November $7.50 calls for $0.40 to $0.45 with shares at $6.61. This was clearly fresh buying, as open interest in the strike was only 388 contracts before that session began.

Those calls traded for as much as $2.60 today, more than 6 times their average purchase price. The stock rose 51.44% in the same time period, a huge move but still nowhere near that of its options on a relative basis.

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.

RLGY is up 8.15% to $10.09 this afternoon. The real-estate and relocation service reported quarterly results yesterday.