$AMD bulls hit it big again

Bullish option traders who opened upside call positions in Advanced Micro Devices (AMD) less than two weeks ago are making big gains today as shares climb to new highs.

On Jul. 24, Market Rebellion’s Unusual Activity Service detected the purchase of 6,550 September $70 calls for $4.13 and $4.14 as part of a bullish roll from an existing winning position, with shares at $65.61. Volume was certainly above the strike’s previous open interest of 1,988 contracts, showing that this was a new position.

Those calls traded have traded for as much as $17.05 today, at least 4 times their purchase prices. The stock rose 30.57% in the same time frame, illustrating the kind of leverage that can be achieved with options.

It is the fourth winning trade in the name to be posted on Market Rebellion in the last two weeks.

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.

AMD was last up by 8.92% to $84.60, just off a new high of $85.80 made earlier in the session. The semiconductor developer’s price target was raised to $95 from $86 this morning at Jefferies.