$AMD call prices triple

Advanced Micro Devices (AMD) shares have been trading sharply higher in recent weeks, turning huge profits on bullish option positions.

On Dec. 3, Market Rebellion’s Unusual Activity Service detected the purchase of 3,300 Weekly $37 calls expiring today for $1.54 to $1.68 with shares at $37.68.

Those calls have traded up to $5.15 today, more than 3 times their purchase prices. The stock rose 11.86% 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 currently lower in afternoon trade by 2.77% to $41.41. The semiconductor developer made a new multi-year high earlier this morning at $42.95 after positive trade news between the U.S. and China.