$SE call prices rocket 6-fold

Bullish option traders are racking up huge profits in Sea Limited (SE) today.

On Oct. 8, our tracking systems detected the purchase of 4,800 November $32 calls for $0.80 to $0.90 below open interest of 1,509 contracts with shares at $28.65. Market Rebellion co-founder Jon Najarian cited the unusual activity at that time on CNBC’s “Halftime Report.”

Those calls traded for as much as $5.01 today, more than 6 times their initial purchase price. The stock rose 29.39% in the same time period, a large move but nowhere near that of its options on a relative basis.

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 currently trading at $36.77, up 18.61% on the session. The Singapore-based digital entertainment, e-commerce, and financial-services company topped quarterly expectations before the market opened today.