$WDAY works for patient bulls

Option traders have racked up large gains on upside positions opened in Workday last summer.

Back on Aug. 28, Investitute’s proprietary programs flagged the purchase of 12,500 March $140 calls for $22.90 to $23.18 as part of a bullish roll with shares at $151.94. Open interest in the strike was a mere 17 contracts before that session began, showing that this was a new position.

Those calls sold for as much as $45.41 today, about twice their purchase prices. The stock rose 21.97% in the same time period, underscoring how options can far outperform their underlying shares.

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.

WDAY jumped to $190.25 early this morning but pulled back with the rest of the market to close at $179.22, down 5.24% on the session. The business cloud-technology company beat quarterly estimates on the top and bottom last late last week.