$TWTR deals option bulls big profits

Option traders are making exponential gains on bullish positions opened in Twitter (TWTR) today on deal news.

On Mar. 25, Market Rebellion’s Unusual Activity Service found that 13,000 May $44 calls were bought for $1.16 to $1.26 above the existing open interest of 4,428 with shares at $38.35.

Those calls have traded for up to $8.45 today, over 6.5 times their purchase prices. The stock rose 35.02% in the same time frame, illustrating the kind of leverage that can be achieved with options.

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 in late session trading is up 5.99% at $51.86.