Game on for $ATVI option bulls

Bullish option traders are racking up big profits in Activision Blizzard (ATVI) today, in positions opened at the beginning of this week.

On May 4, Market Rebellion’s tracking systems found that 3,300 Weekly $67 calls expiring this Friday, May 8 were bought for $1.79 to $2.50 with shares at $65.59. This was clearly a new position, as open interest in the strike was only 973 contracts before the trade occurred.

Those calls traded for as much as $7.75 this morning , at least 3 times their purchase price. The stock rose 13.59% in the same time frame, illustrating the kind of leverage that can be achieved with options.

Long calls lock in the price where a stock can be purchased, gaining with a rally and providing leverage to the underlying shares. The contracts can quickly lose value if the stock stalls or pulls back but also carry less risk than owning the shares themselves.

ATVI ended the day at $72.87, up 6.33%. The game developer beat estimates on its top and bottom lines during earnings last night while also guiding FY20 and Q2 higher.