$ZNGA option bulls play for fast profits

Zynga (ZNGA) is returning fast, exponential profits for bullish option traders today.

On Thursday, Jan. 6, Market Rebellion’s Unusual Activity Service found that 29,600 January $6.50 calls were for $0.10 to $0.18 above the existing open interest of 2,135 contracts with shares at $6.11.

Those calls traded for as much as $2.40 today, at least 13 times their purchase prices. The stock rose 45.66% 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 was last at $8.54, up 42.25% on the day.