Bulls score big again in $NVDA

Option traders tripled their money on upside positions in Nvidia today, their second win in as many sessions.

On Dec. 26, Investitute’s tracking systems detected the purchase of 2,500 March $140 calls for $8.52 as part of a bullish spread with shares at $124.86. This was clearly a new position, as open interest in the stock was only 419 contracts before that session began.

Those calls traded for as much as $24.25 this afternoon, nearly 3 times their purchase price. The stock rallied 31.51% in the same time period, a huge move but nowhere near that of its options on a relative basis.

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.

It is the second winning trade in the name posted on Investitute in two days.

NVDA is up 0.86% to $162.52 today. Yesterday the graphics-chip maker announced plans to purchase semiconductor company Mellanox (MLNX) for $6.9 billion.