Bulls triple their money in $JD

JD.com has seen consistently bullish option activity for several weeks, and traders cashed in on the name again today.

On Jan. 18, Investitute’s tracking systems detected the purchase of 7,000 March $25 calls for $1.13 and $1.14. The trade was part of a bullish spread with shares at $23.45.

Those calls traded for $4.25 today, more than 3.5 times their purchase prices. The stock rose 24.43% in the same time period, illustrating the kind of leverage that can be achieved with options.

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.

It is the third winning trade in the name posted on Investitute in as many sessions.

JD was up 0.56% to $28.89 today. The Chinese e-commerce company surpassed quarterly expectations on Feb. 28.