$ATVI bulls turn quick profits

Option traders doubled their money today on upside positions opened in Activision Blizzard only a few sessions ago.

On Feb. 11, Investitute’s tracking systems detected the purchase of 5,500 February $42 calls for $1.42 to $2.25 with shares at $42.72. This was clearly fresh buying, as open interest in the strike was only 139 contracts before the activity appeared.

Those calls sold for as much as $3.35 this afternoon, about twice their average purchase price. The stock rose 6.04% in the same time frame, showing the kind of leverage that can be achieved quickly with options. Investitute co-founder Jon Najarian cited February call buying on CNBC’s “Halftime Report” last 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.

ATVI jumped 6.96% to $44.57 today. The game developer missed earnings estimates last night but rallied after announcing plans to cut 8% of its workforce.