$VIPS call prices rocket 26-fold

Bullish option traders have scored astronomical gains in Vipshop.

On Dec. 13, Investitue’s proprietary programs flagged the purchase of 6,200 May $16 calls for $0.10 to $0.13 with shares at $8.28. These were clearly new positions, as open interest in the strike was only 528 contracts before that session began.

Those calls traded for $2.65 this morning, more than 26 times their original purchase price. The stock more than doubled by 116% in the same time period, but even that gigantic move was dwarfed by the exponential move in its 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.

VIPS jumped 5.88% to $18 today. The Chinese discount retailer has rallied on partnerships with other e-commerce leaders in that country, leading to analyst upgrades.