$TRIP bulls triple their money

It took barely a week for TripAdvisor to turn hefty profits on upside option positions.

On Feb. 6, Investitute’s proprietary programs cited the purchase of 1,750 March $41 calls for $1.90 to $2.08 as part of a bullish roll with shares at $33.30. This was clearly a new position, as open interest in the strike was only 270 contracts before the trade occurred.

Those calls sold for $6.20 this morning, more than 3 times their original purchase price. The stock rose 22.2 percent in the same time frame, showing how options can outpace gain in 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.

TRIP was up 4.13% to $42.40 today. The travel-review service topped quarterly estimates after the market closed yesterday.