$ATVI bulls play for profits

Bullish option traders are posting exponential profits in Activision Blizzard (ATVI) today.

Back on Dec. 16, Market Rebellion’s Unusual Activity Service detected the purchase of 6,000 February $67.50 calls, as part of a bullish spread, for $1.72 with shares at $60.81. Open interest in the strike before the trade occurred was just 3,995 contracts, showing that this was a new position.

Those calls traded up to $19.70 today, more than 11 times their purchase price. The stock rose 42.81% in the same time period, 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.

ATVI was last higher on the day by 26.42% at $82.66.