$FIT calls up 560% in less than a week

Fit826

Bullish option positions in Fitbit are sprinting higher.

On Tuesday, Investitute’s market scanners determined that 3,800 Weekly 5.50 calls that expired this afternoon were purchased for $0.03 to $0.07 with shares at $5.27. Volume was well above the strike’s open interest of 1,097 contracts, indicating that this was fresh buying.

Those calls traded as high as $0.33 today, an average gain of 560 percent. The stock was up 10.4 percent in the same time frame, showing how quickly options can far outpace the gains in their underlying shares.

Long calls lock in the price where the stock can be purchased, increasing 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.

FIT was up 1.24 percent to $5.73 today. The fitness-device retailer, which surged after reporting a quarterly loss that was narrower expected early this month, has been the subject of takeover rumors this week.

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Mike Yamamoto

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