Bulls double money in $AMD

It took only a week for Advanced Micro Device (AMD) to return large gains on upside option positions.

On May 21, Investitute’s market scanners found that 3,000 Weekly $27 calls expiring on June 7 were bought for $1.22 as part of a bullish spread with shares at $27.15. This was clearly a new position, as open interest in the strike was only 1,121 contracts before that session began.

Those calls traded for as much as $2.91 this afternoon, nearly 2.5 times their purchase price. The stock rose 9.17% 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.

AMD jumped 9.8% to $29.03 today. The semiconductor maker rallied sharply after announcing new chip releases and graphics cards that could take market share.