$AMD call prices soar 4-fold

Advanced Micro Devices (AMD) shares have soared higher since reporting earnings, turning huge profits on bullish option positions.

On Oct 16, Market Rebellion’s tracking systems detected the purchase of 3,600 November $34 calls for $0.95 and $0.96 as part of a bullish spread with shares at $31.14.

Those calls have traded up to $4.10 today, more than 4 times their purchase prices. The stock rose 22.13% in the same time frame, 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.

AMD is just off session highs, up 1.29% to $38.00 today. The semiconductor developer met earnings expectations and guidance during its last quarterly report, delivered on Oct. 29.