$IBM calls double overnight

Option traders are turning big profits today on bullish positions opened in IBM (IBM) one session earlier, only hours before the company reported quarterly results.

Just yesterday, Market Rebellion’s Unusual Activity Service showed that 3,358 Weekly $144 calls expiring on Jan. 24 were bought for $1.02 with shares at $138.55. Open interest in the strike was only 684 contracts before that trade occurred, showing that this was a new position.

Those calls have changed hands for as much as $2.59 so far today, more than 2.5 times their purchase price. The stock rose 5.18% in the same time frame, illustrating the kind of leverage that can be achieved quickly 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.

IBM is up 3.81% to $144.47 this morning. The computing icon topped earnings and revenue estimates after the market closed yesterday.