Call prices quadruple in $SE

Bullish option traders are logging exponential gains in Sea Limited (SE) today for the second session in a row.

Market Rebellion’s proprietary programs flagged bullish option activity in the name on two consecutive sessions last month:

–On Oct. 22, 5,000 December $28 calls were purchased for $2.15 to 2.25 above open interest of 106 contracts with shares at $27.45.
–On Oct. 23, 2,000 December $28 calls were bought for $2.10 below open interest of 8,154 contracts but apparently adding to volume in the same strike from the previous session, with shares at $27.60.

Those calls are marked at $8.80 today, more than 4 times their average purchase price. The stock rose 32.64% in the same time period, a huge move but nowhere near that of its options on a relative basis.

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

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.

SE is off 0.16% to $36.70 this morning. The Singapore-based digital entertainment, e-commerce, and financial-services company topped quarterly expectations before the market opened yesterday.