$TWTR calls turn quick profits

Option traders more than tripled their money today on bullish positions opened in Twitter (TWTR) only last week.

On Dec. 12, our Unusual Activity Service detected the purchase of 8,000 December $30.50 calls expiring today for $0.41 to $0.50 with shares at $30.04. This was clearly fresh buying, as open interest in the strike was only 3,034 contracts before that session began.

Those calls have traded for as much as $1.66 so far today, more than triple their purchase prices. The stock rose 7.02% in the same time frame, illustrating the kind of leverage that can be achieved with options.

Long calls lock in the price where a stock can be purchased, gaining with a rally and providing leverage to the underlying shares. The contracts can quickly lose value if the stock stalls or pulls back but also carry less risk than owning the shares themselves.

TWTR is up 0.11% to $32.06 this morning. The social-media company’s shares closed above their 50-day simple moving average yesterday for the first time since late September.