$TRIP call prices triple

Bullish option traders posted giant gains in TripAdvisor (TRIP) today.

On Feb. 19, Market Rebellion’s Unusual Activity Service detected the purchase of 27,947 March $30 calls, expiring today, for $9.80 with shares at $39.73. This was clearly fresh buying, as open interest for the contract was only 1,527 before that session began.

Those calls have traded for $29.55 today, just over 3 times their purchase price. The stock rose 49.96% in the same time 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.

TRIP was last up by 1.38% at $59.58. The travel-review service is expected to report earnings around May 6.