$ZNGA bulls game for quick gains

Zynga (ZNGA) returned quick gains for bullish option traders today.

On Dec. 4, Market Rebellion’s Unusual Activity Scanners found that 11,600 Weekly $9 calls expiring on Jan. 8 were bought for $0.28 to $0.33 with shares at $8.52. This was clearly fresh buying, as open interest in the strike was only 9,239 contracts before that session began.

Market Rebellion co-founder Pete Najarian cited the activity that day on CNBC’s “Halftime Report.”

Those calls traded for as much as $0.70 today, at least double their purchase prices. The stock rose 11.97% in the same time frame, illustrating the kind of leverage that can be achieved with options.

Long calls lock in the price where a stock can be purchased, gaining with a rally and providing leverage to the underlying shares. The contracts can quickly lose value if the stock stalls or pulls back but also carry less risk than owning the shares themselves.

ZNGA finished at $9.52, up 4.39% on the day. JPMorgan upgraded the social game developer to Overweight from Neutral this morning, while raising its price target on the shares to $12 from $10.