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Options Action

Stitch Fix is up 90% since its IPO, and traders say there’s more room to run

Options traders are betting Stitch Fix could soar even higher

Stitch Fix shares are on fire, and some traders are betting the rally will get even hotter.

Shares of the clothing subscription company soared more than 8 percent on Thursday, and are up more than 11 percent so far this week. The move was in part due to rumors that billionaire Oprah Winfrey was taking a stake in the company, which were quickly denied by a Winfrey representative.

According to Dan Nathan of RiskReversal.com, the options market is sizzling for the stock.

On Wednesday, Nathan highlighted a block of traders purchasing the July 30 calls for an average price per contract of $1.33. These are bullish bets that shares of Stitch Fix will rise above $31.33 or more than 8 percent higher from their current levels by next month.

Shares of the personal shopping service provider have surged more than 50 percent since hitting a low of $18.35 earlier this month. Moreover, Nathan pointed out that despite short interest in the stock up at 20 percent, it could be still be poised for a bigger breakout.

"A lot of these recent IPOs are doing very well right now," he said Wednesday on CNBC's "Fast Money," "So it's kind of a tough trade to fade at the moment."

Stitch Fix shares are up 90 percent since going public in November and have now risen 11 percent year to date.