$AMD bulls double their money

Advanced Micro Devices (AMD) shares have been trading sharply higher in recent months, turning huge profits on bullish option positions for the second time in a month.

On Jan. 27, Market Rebellion’s Unusual Activity Service detected the purchase of 11,000 February $48 calls for $3.50 to $3.60 with shares at $48.68. Volume was well above the strike’s previous open interest of 7,081 contracts, showing that these were new positions.

Those calls have traded up to $7.46 today, more than 2 times their purchase prices. The stock rose 13.76% in the same time frame, illustrating the kind of leverage that can be achieved with options.

It is the second winning trade in the name to be posted on Market Rebellion in the past month.

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.

AMD is currently off session highs trading up on the day by 0.17% to $54.62. The semiconductor developer made a new all-time-high earlier this morning at $55.40 after its peer Nvidia (NVDA) beat earnings expectations after the closing bell yesterday.