$AAPL calls return four-fold intraday

Nimble option traders who opened upside positions in Apple this morning quadrupled their money at the closing bell.

This morning, Investitute’s market scanners found that 7,124 Weekly $160 calls expiring on January 4 were bought as part of a bullish spread for $0.61 with shares at $148.61. Volume was well above the strike’s open interest of 4,015 contracts, indicating that this was clearly fresh buying.

Those calls traded for as much as $2.50 at the closing bell today, 4 times their purchase price. The stock rallied 5.78% at the same time, a huge move but nothing like that of its options on a relative basis.

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.

AAPL was up 7.04% to close at $157.17 today. The iPhone maker snapped back from its mid-2017 lows as the broader market rebounded from an eight-session streak of lower closes.