Bulls triple money in $NVDA

Option traders received belated Christmas gifts from Nvdia today.

On Dec. 26, Investitute’s tracking systems flagged bullish activity in two NVDA contracts that expired this afternoon:

—2,200 February $140 calls were bought for $7.35 above open interest of 447 contracts with shares at $124.86. Those calls sold for $23.30 today, about 3.2 times their purchase price.
—2,000 February $135 calls were purchased for $8.80 above open interest of 202 contracts with shares at $125.08. Those calls traded for $29.20 today, more than 3.3 times their purchase price.

The stock, which traded for $124.86 to $125.08 at the time of these trades, rose 30.74% and 30.97% since then. Although those are large gains, they pale in comparison to that of their 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.

NVDA spiked to $163.86 this morning before pulling back to close at $157.34, still up 2.81% on the session. The graphics-chip maker rallied on strong guidance issued after the market closed yesterday.