$AMD calls deliver for bulls

Bullish option traders have been rolling in the chips lately, notably those who opened upside call positions in Advanced Micro Devices (AMD) last Friday that are making big gains today as shares climb to new highs after the company’s earnings report.

On Jul. 24, Market Rebellion’s Unusual Activity Service detected the purchase of 2,700 Weekly $72 calls expiring this Friday, Jul. 31, for $1.63 as part of a bullish roll with shares at $65.47. Volume was certainly above the strike’s previous open interest of 689 contracts, showing that this was a new position.

Those calls have so far traded for as much as $5.15 this morning, more than 3 times their purchase price. The stock rose 17.23% in the same time frame, showing how quickly options can far outperform their underlying shares.

It is the third winning trade in the name to be posted on Market Rebellion in the past week.

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 11.27% to $75.23, setting new highs today. The semiconductor developer reported a beat on its top and bottom lines during its earnings report last night after the market closed.