$ZNGA bulls make fast money

Zynga (ZNGA) returned fast profits for bullish option traders today.

On Friday, May 29, Market Rebellion’s Unusual Activity Scanners found that 8,000 July $8 calls were bought for $0.79 to $0.82 with shares at $8.45. This was clearly fresh buying, as open interest in the strike was only 1,069 contracts before that session began.

Those calls traded for as much as $1.82 so far today, at least double their purchase prices. The stock rose 60.73% in the same time frame, illustrating the kind of leverage that can be achieved with options.

It is the second winning trade in the name posted on Market Rebellion in as many sessions.

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 was last at $9.46, down 2.07% on the day after making a new multiyear high of $9.92 earlier in the session. The social-game developer’s share price was upgraded to $11 by Piper Sandler, Benchmark, and Jefferies this morning.