$PYPL calls quadruple in a day

Option traders cashed in huge profits today on upside positions opened in PayPal (PYPL) only one session earlier.

Just yesterday, Market Rebellion’s proprietary programs showed that 2,500 Weekly $96 calls expiring Friday afternoon were bought for $2.14 to $2.87 as part of a bullish spread with shares at $96.16. This was clearly a new position, as open interest in the strike was a mere 214 contracts before the trade occurred.

Those calls sold for as much as $10.81 today, more than 4 times their average purchase price. The stock rose 11.08% at the same time, showing 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.

PYPL is up 7.09% to $103.50 this morning. The electronic-payment service beat estimates on the top and bottom lines after the market closed yesterday.