Bulls double money in $JD

Option traders have been piling into JD.com (JD) all month, and their upside bets are paying off.

On June 7, Investitute’s tracking systems detected the purchase of 6,500 July $27 calls for $1.42 to $1.52 above open interest of 1,432 contracts with shares at $26.98. Investitute co-founder Jon Najarian cited the unusual activity at that time on CNBC’s “Halftime Report.”

Those calls traded up to $3.90 today, more than 2.5 times their purchase prices. The stock rose 13.64% in the same time period, showing how options can far outpace gains in 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.

JD is up 1.19% to $30.50 in midday trading. The Chinese e-commerce stock has risen sharply ahead of the G-20 meeting this week.