$SAVE call prices up fourfold

Bullish option traders scored exponential gains in Spirit Airlines today.

On Sept. 20, Investitute’s market scanners identified the purchase of 1,000 January $50 calls for $3.20 as part of a bullish spread with shares at $48.53. Volume was above the strike’s open interest of 938 contracts, showing that it was a new position.

Those calls traded up to $12.70 today, about 4 times their purchase price. The stock rose 27.67% in the same time period, a large move but 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.

SAVE spiked higher by 15.26% to $58.76 today. The discount airline rallied after raising its revenue outlook.