Bulls keep winning in $JD

Option traders that made bullish trades in JD.com (JD) last year are seeing exponential gains today as the stock makes a new 52-Week high.

On Aug. 9, Market Rebellion’s Unusual Activity systems detected the purchase of 5,000 January $35 calls for $0.75 as part of a bullish combo, where an equivalent amount of puts were sold, with shares at $27.07. Market Rebellion co-founder Jon Najarian cited the unusual activity and the potential double bottom chart pattern at that time on CNBC’s “Halftime Report.”

Those calls traded up to $5.80 today, more than 7.5 times their purchase prices. The stock rose 43.15% in the same time period, showing how options can far outpace gains in their underlying shares.

It is the third winning trade in the name posted on Market Rebellion in the past week.

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 0.72% to $38.60 in midday trading. The Chinese e-commerce stock has risen sharply over the past month, along with the KraneShares CSI China Internet ETF (KWEB), which it is the fifth top component of.