$ZM bulls double their money in hours

Option traders are making fast profits, doubling their money on upside positions in Zoom Video Communications (ZM) today.

Just over 5 minutes into today’s session, our proprietary programs found that 4,900 Weekly $380 calls expiring this Friday, September 11, were bought for $6.30 to $8.90 above open interest of 599 contracts with shares at $369.01.

Those calls traded for $19.21 this afternoon, at least twice their purchase prices. The stock rose 6.38% in the same time frame, showing how quickly options can far outperform moves in their underlying shares 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.

ZM gapped higher this morning and was last up by 9.79% to $385.23, rebounding sharply today after pulling back since its most recent earnings report.