Bulls triple money in $JD

Option traders have been piling into JD.com (JD) all summer, and their upside bets are paying off.

On Aug. 5, Investitute’s tracking systems detected the purchase of 3,500 Weekly $27 calls expiring on 23August for $1.06 to $1.10 above open interest of 90 contracts with shares at $25.90.

Those calls have thus far traded up to $3.75 today, more than 3 times their purchase prices. The stock has risen 18.34% in the same time period, showing how options can far outpace gains in their underlying shares.

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.

JD is up 12.89% to $30.64 in midday trading. The Chinese e-commerce stock has risen sharply after reporting quarterly earnings results, where it beat on both its top and bottom lines.