Why call buyers scored big in $I

Option traders quadrupled their money in Intelsat today.

On May 1, Investitute’s market scanners identified the purchase of 2,194 September $15 calls for $1.70 as part of a bullish roll with shares at $11.01. This was clearly a new position, as volume was well above the strike’s open interest of 1,352 contracts.

Those calls traded up to $6.70 today, about 4 times their purchase price. The stock rocketed 78.2% in the same time, a huge move but far below 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.

I spiked higher by 12.5% to $19.62 today. The Federal Communications Commission voted to allow consideration of a consortium formed by the Luxembourg-based satellite operator with its rivals, a move that could collect huge fees from mobile broadband providers that now use airwaves dedicated to TV and cable companies.