$TWTR call prices keep flying higher

Option traders more than tripled their money today on bullish positions opened in Twitter (TWTR) only last week.

On Dec. 16, our Unusual Activity Service detected the purchase of 10,000 Weekly $31 calls expiring this Friday, Dec. 27, for $0.38 to $0.45 with shares at $30.72. This was clearly fresh buying, as open interest in the strike was only 1,673 contracts before that session began. Market Rebellion co-founder Jon Najarian cited the unusual activity while making the name his Final Trade on CNBC’s “Halftime Report.”

Those calls have traded for as much as $1.60 so far today, more than 3.5 times their purchase prices. The stock rose 6.09% in the same time frame, illustrating the kind of leverage that can be achieved with options.

It is the second winning trade in the name to be posted on Market Rebellion this month.

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.

TWTR is up 1.29% to $32.54 this morning. The social-media company’s optics should improve in the second half of 2020, according to Baird this morning, keeping their price target at $39 for the shares.