$AMD calls double overnight

Option traders logged quick gains today on bullish positions opened in Advanced Micro Devices only one session earlier.

Just yesterday, Investitute’s proprietary programs found that 5,200 Weekly $23.50 calls expiring on Feb. 22 were purchased for $0.31 to $0.60 with shares at $23.19. Volume was well above the strike’s previous open interest of 3,041 contracts, indicating that this was fresh buying. Investitute co-founder Pete Najarian cited the unusual activity at that time on CNBC’s “Halftime Report.”

Those calls traded up to $0.91 today, twice their average purchase price. The stock rose 3.67% at the same time, underscoring how quickly options can far outpace gains in their underlying shares. It is the third winning AMD trade posted on Investiute in as many weeks.

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.

AMD closed at $23.68 today, up 2.38% on the session. The chip maker issued a strong outlook after announcing quarterly results on Jan. 29.