$SHAK calls skyrocket 20-fold

Bullish option traders collected stratospheric gains in Shake Shack today after strong quarterly results.

On April 27, Investitute’s proprietary programs found that 2,800 Weekly $50 calls expiring this afternoon were purchased for $0.43 to $0.75 with shares at $46.96. These were new positions, as there was no open interest in the strike before the trades occurred.

Those calls sold for $8.72 today, more than 20 times their initial purchase price. The stock surged 24.8% in the same frame, a large move but nowhere near that of its 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.

SHAK spiked higher by 18.01% today to close at $55.95 after reaching a 52-week high of $58.98 this morning. The fast-food chain topped earnings estimates and raised its outlook after the market closed yesterday.