$AMTD call prices soar 4-fold

Option traders are running up exponential gains in TD Ameritrade (AMTD) today thanks to strong quarterly results.

On Oct. 4, Market Rebellion’s activity scanners found that 4,000 Weekly $34 calls expiring this Friday were bought for $1.10 to $1.40 with shares at $33.52. This was clearly fresh buying, as open interest in the strike was a mere 10 contracts before that session began.

Those calls traded for as much as $4.75 so far today, more than 4 times their initial purchase price. The stock rose 15,47% in the same time frame, underscoring how quickly options can far outperform 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.

AMTD is up 2.2% to $38.48 this afternoon. The online brokerage beat earnings and revenue estimates after the market closed yesterday.