$JD call prices triple overnight

Option traders are already racking up exponential gains on bullish positions opened in JD.com only one session earlier.

Just yesterday, Investitute’s tracking systems detected the purchase of 12,000 May $26 for $1.21 to $1.48 with shares at $26.32. This was clearly fresh buying, as open interest in the strike was only 929 contracts before the activity appeared.

Those calls traded for as much as $4.48 this morning, more than 3.5 times their purchase price. The stock rose 15.45% at the same time, showing how quickly 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 spiked to $30.47 just after today’s opening bell but pulled back to close at $28.17, still up 2.4% on the session. The Chinese e-commerce company’s earnings blew past expectations before the market opened this morning.