Call buyers score in $NVDA

Bullish option traders are scoring huge profits on upside positions in Nvidia (NVDA) today after its earnings report.

On Dec. 27, Market Rebellion’s Unusual Activity Service detected the purchase of 5,000 June $220 calls for $33.58 as part of a bullish roll with shares at $237.01. Volume was well above the strike’s previous open interest of 2,501 contracts, indicating that these were new positions.

Those calls have so far traded for as much as $78.95 today, more than double their purchase price. The stock rallied 24.27% in the same time period, a large 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 to be posted on Market Rebellion this week.

NVDA is up 7.02% to $289.79 currently, just off its new all-time-high of $294.97 made earlier this session. The graphics-chip maker delivered its quarterly earnings report yesterday after the closing bell, beating on both its top and bottom lines.