Bulls score quick gains in $ATVI

It took less than a week for option traders to double their money in Activision Blizzard.

On Feb. 11, Investitute’s market scanners identified the purchase of 9,000 February $43 calls for $1.09 to $2.35 with shares at $42.72. This was clearly fresh buying, as open interest in the strike was only 1,308 contracts before the activity appeared.

Those calls sold for $3.55 today, twice their average purchase price. The stock rose 0.89% in the same time frame, showing how quickly 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. It is the second winning trade in the name posted on Investitute in as many days.

ATVI was up 1.93% to $45.43 today. The game developer fell short of quarterly estimates Wednesday evening but rallied after announcing layoffs.