$AVGO bulls double money

Option traders have doubled their money on upside positions opened in Broadcom (AVGO) just over a week ago.

On Nov. 4, Market Rebellion’s proprietary programs flagged the purchase of 2,500 November $305 calls for $2.80 to $3.20 with shares at $300.47. Volume was well above the strike’s previous open interest of 805 contracts, indicating that this was new positioning.

Those calls have traded for as much as $7.02 today, more than twice their purchase prices. The stock rose 3.42% in the same time frame, 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.

AVGO is lower by 1.53% to $308.86 in morning trading. The semiconductor manufacturer is expected to deliver its fourth quarter earnings results after the market closes on Dec. 12.