$SE keeps winning for bulls

Bullish option traders cashed in on Sea Limited (SE) today for the fourth time in less than two weeks.

On May 3, Investitute’s tracking systems identified the purchase of 3,600 June $28 calls for $0.85 to $0.95 with shares at $25.51. This was clearly a new position, as open interest in the strike was a mere 8 contracts before the trade occurred.

Those calls sold for $2.15 today, more than twice their purchase price. The stock rose 14.5% in the same time, showing how options can far outperform their underlying shares.

It is the fourth winning trade in the name posted on Investitute since May 17.

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 reached a session high of $30.62 this morning but pulled back with the rest of the market to finish the day down 2.67% to $29.19. On May 21, the Singapore-based digital entertainment, e-commerce, and financial-services company reported that quarterly active users reached 271.6 million, up 114.4% from last year, while first-quarter revenue per user rose to $1.40 from $1.20 in the same period.