$WWE bulls triple their money

Option traders are collecting exponential profits in World Wrestling Entertainment with shares at record highs.

On June 26, Investitute’s market scanners identified the purchase of 2,500 October $70 calls for $5 as part of a bullish spread with shares at $66.72. This was clearly a new position, as open interest in the strike was only 275 contracts before the activity appeared.

Those calls sold for $17.95 today, more than 3.5 times their purchase price. The stock rallied 30.82% at the same time, a huge move but still nowhere near that of its options. Investitute co-founder Pete Najarian cited even more buying the the January $90 calls on CNBC’s “Halftime Report” Aug. 29.

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.

WWE was up 0.71% to $87.64 today. The media and entertainment company topped quarterly revenue projections in late June and reached an all-time high of $89.21 in the previous session.