Bulls score big again in $AMD

Option traders chalked up large gains on upside positions in Advanced Micro Devices today for the second session in a row.

On Jan. 7, Investitute’s proprietary programs flagged the purchase of 4,200 March $20 calls for $2.09 to $2.50 with shares at $19.64. This was clearly fresh buying, as open interest in the strike was only 793 contracts before that session began.

Those calls traded for as much as $5.53 today, more than twice their purchase prices. The stock rose 28.16% in the same time frame, a large gain but nowhere near that of its options on a relative basis. This is the second winning trade in the name posted on Investitute in as many days.

Long calls lock in the price where investors can buy a stock, letting them position for a rally at limited cost with the potential for significant leverage. They carry less risk than owning shares because the most that can be lost is the price of the options no matter how far the stock might fall.

AMD jumped another 5.72% to $24.41 today after surging nearly 20% in the previous session. The chip maker issued strong guidance after reporting quarterly earnings Tuesday evening.