Calls buyers find fast profits in $NVDA

Bullish option traders are racking up fast profits today in Nvidia (NVDA).

Yesterday morning on Mar. 30, Market Rebellion’s Unusual Activity Service flagged the purchase of 5,000 Weekly $520 calls expiring tomorrow, Feb. 12, for $4.26 to $5.75 with shares at $514.05. This represented fresh buying, as open interest in the strike was 1,615 contracts before the trades appeared.

Those calls traded for as much as $18.95 today, at least 3 times their purchase prices. The stock rose 4.76% at the same time, underscoring how quickly 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.

NVDA closed at $533.93, up 3.7% on the day.