Calls buyers score big, fast profits in $NVDA

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

On Feb. 8, Market Rebellion’s Unusual Activity Service flagged the purchase of 4,300 Weekly $570 calls expiring tomorrow, Feb. 12, for $2.77 to $4.45 with shares at $550.87. This represented fresh buying, as open interest in the strike was 3,036 contracts before the trades appeared.

Those calls traded for as much as $41.00 today, at least 9 times their purchase prices. The stock rose 9.84% 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 traded up to as high as $610.89 this afternoon and closed at $610.03, up 3.3% on the day alongside its peers.