Bulls keep scoring with $JD

Option traders that made bullish trades in JD.com (JD) back in the middle of July scored big today.

On Jul. 16, Market Rebellion’s Unusual Activity systems detected the purchase of 14,000 September $62.50 calls for $4.25 to $4.55 with shares at $60.60. Volume was well above the strike’s previous open interest of just 1,967 contracts, indicating that this was a new position.

Those calls traded up to for $17.45 today, more than 3.5 times their purchase prices. The stock rose 31.68% in the same time period, showing how options can far outpace gains in their underlying shares.

It marks the second winning trade in the name posted on Market Rebellion this month.

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 was up 3.66% to $78.97 at the close today. The Chinese e-commerce stock’s price target was raised to $83 from $79 at Barclays yesterday.