$ATVI call buyers run up score

Bullish option traders posted exponential gains in Activision Blizzard today.

On Feb. 20, Investitute’s market scanners detected the purchase of 19,000 March 75 calls for $0.54 to $0.62 with shares at $70.19. These were clearly new positions, as open interest in the strike was only 1,839 contracts before the activity appeared.

Those calls traded up to $2.44 today, more than 4.5 times their original purchase price. The stock rose 9.52% in the same time frame, illustrating 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.

ATVI was up 3.7% today to close at $76.81. The game developer reached an all-time high of $76.88 today after announcing that it would release the latest title in its “Call of Duty” franchise on Oct. 12.