$VRAY calls rocket 8-fold

Bullish option traders are logging enormous profits in ViewRay (VRAY) today.

On Nov. 13, Market Rebellion’s Unusual Activity Service flagged the purchase of 5,000 December $3 calls at the same time for $0.20 to $0.25 with shares at $2.52. Open interest in the strike was only 745 contracts before the trade occurred, showing that this was a new position.

Those calls have traded for as much as $1.75 so far today, about 8 times their average purchase price. The stock soared 88.5% in the same time frame, a huge move but still one that was dwarfed by that of its options on a relative basis.

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.

VRAY is up 39.71% to $4.75 this afternoon. The radiation-therapy systems company announced non-binding collaborative agreements with Medtronic (MDT) and Elektra after the market closed yesterday.