$ATVI calls quintuple overnight

Bullish option traders collected exponential profits in Activision Blizzard today, only one session after opening their positions.

Just yesterday, Investitute’s tracking systems detected the purchase of 5,000 September $75 calls for $0.86 to $1.10 with shares at $73.91. This was clearly fresh buying, as volume was well above the strike’s open interest of 2,662 contracts.

Those calls sold for $4.90 just before the closing bell today, more than 5 times their initial purchase price. The stock rose 7.56% at the same time, showing 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 jumped 7.06% to $79.50 today. The game developer rallied after releasing a beta version of “Call of Duty: Black Ops 4” for the PlayStation featuring a “battle royale” mode designed to compete with the popularity of “Fortnite.”