$AMD calls triple overnight

Option traders racked up large gains today on bullish positions opened in Advanced Micro Devices only one session earlier.

Just yesterday, Investitute’s tracking systems detected the purchase of 6,200 March $22.50 calls for $0.36 to $0.56 with shares at $22.58. Volume was well above the strike’s previous open interest of 2,837 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 for as much as $1.33 this afternoon, about 3 times their average purchase price. The stock rose 5.27% in the same time frame, underscoring how quickly options can far outpace gains in their underlying shares.

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 was up 2.31% to $23.49 today. The company rallied along with other chip makers after Nvidia’s (NVDA) planned acquisition of Mellanox (MLNX).