$SVMK call prices double overnight

Bullish option trades on SurveyMonkey doubled one day after they were opened.

Just yesterday, Investitute’s market scanners found that 3,000 July 20 calls were bought for $0.40 and $0.45 with the underlying shares at $15.00. As open interest in the strike leading up to this trade was only 70 contracts, it was clearly a new position.

New buyers of those July 20 calls paid as much as $1.00 for them this afternoon, more than double their initial purchase price. The underlying stock rose 12.73% at the same time, underscoring how quickly options can far outperform their underlying shares.

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.

SVMK rallied to close up 10.37% at $16.82 to end the session. The cloud-based online survey company’s lockup from its IPO ended yesterday.