$SFIX bulls quadruple their money

Option traders turned big profits on upside positions in Stitch Fix (SFIX) today.

On Jan. 9, Market Rebellion’s proprietary programs flagged the purchase of 2,000 February $25 calls for $0.75 to $0.85 as part of a complex bullish spread with shares at $23.31. This was clearly fresh buying, as open interest in the strike was a mere 378 contracts before that session began.

Those calls have traded up to $3.85 this morning, more than 4.5 times their purchase prices. The stock rose 23.81% in the same time period, a huge move but still far below that of its options on a relative basis.

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.

SFIX is up 1.16% to $28.86 in early trade today. The online-clothing retailer’s shares are at their highest level in more than six months.