$NTNX calls post quick gains

Option traders have more than doubled their money on bullish positions opened in Nutanix (NTNX) only two sessions ago.

On Nov. 22, Market Rebellion’s Unusual Activity Service found that 2,200 Weekly $30 calls expiring this Friday were bought for $1.96 to $2.15 with shares at $29.22. This was clearly fresh buying, as open interest in the strike was only 424 contracts before the activity appeared.

Those calls have traded for as much as $5.04 so far today, about 2.5 times their average purchase price. The stock rose 19.44% in the same time frame, underscoring how quickly options can far outperform their underlying shares.

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.

NTNX is up 16.17% to $33.40 today. The business-cloud technology company drew a slew of analyst upgrades this morning after topping quarterly expectations yesterday afternoon.