$JD bulls triple their money

Option traders racked up exponential gains on upside positions in JD.com (JD) today.

On Oct. 1, Market Rebellion’s activity scanners found that 3,000 Weekly $28.50 calls expiring this Friday were bought for $0.58 as part of a bullish spread with shares at $28.10. This is clearly fresh buying, as open interest in the strike was only 372 contracts before that session began.

Those calls traded for as much as $1.77 today, more than 3 times their purchase price. The stock rose 7.69% in the same time period, underscoring how options can far outperform 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 4.48% to $29.86 in late-day trading. The Beijing-based e-commerce company rallied on positive developments in U.S.-China trade negotiations.