Bulls chip for fast profits with $QCOM

Upside option positions in Qualcomm (QCOM) that expire next Friday are rewarding bullish traders today.

Yesterday on Sep. 24, Market Rebellion’s Unusual Activity Service identified the purchase of 4,100 Weekly $115 calls, expiring on Oct. 2. for $0.90 to $1.40 with shares at $111.52. This was clearly fresh buying, as open interest in the strike was only 2,447 contracts before the activity appeared.

Market Rebellion co-founder Jon Najarian cited the unusual activity yesterday during his 3@3 live show, airing everyday at 3 PM ET.

Those calls have traded for as much as $2.79 so far today, double their purchase prices. The stock rose 3.79% in the same time frame, illustrating the kind of leverage that can be achieved quickly 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.

QCOM was last up 2.13% to $114.58 this afternoon. Exane BNP Paribas upgraded the name to Outperform from Underperform this morning.