$Z call prices rise 10-fold

Option traders are reaping exponential profits today on bullish positions opened in Zillow (Z).

On Jun. 24, Market Rebellion’s Unusual Activity Service identified the purchase of 3,125 January $100 calls in one print for $2.05 as part of a bullish roll with shares at $59.46. This was clearly fresh buying, as open interest in the strike was only 2,182 contracts before that session began.

Those calls have traded for as much as $20.40 so far today, about 10 times their purchase price. The stock rose 87.44% in the same time period, a huge move but nowhere near 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.

Z is up 2.05% to $110.40 in afternoon trading after reaching a new high earlier of $112.49. Jefferies raised its price target on the real-estate company’s stock to $112 from $83 Thursday.