$INTC bulls double their money

It took only two days for traders to score large profits on upside positions in Intel.

On Jan. 30, Investitute’s tracking systems found that 9,500 Weekly $48 calls expiring on March 1 were purchased for $0.67 to $0.70 with shares at $46.63. This was clearly fresh buying, as open interest in the strike was onnly 948 contracts before the activity appeared. Investitute co-founder Pete Najarian cited the unusual activity at that time on CNBC’s “Halftime Report.”

Those calls traded for as much as $1.72 today, about 2.5 times their purchase prices. The stock rose 5.15% in the same time frame, showing how quickly options can far outpace gains in 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.

INTC was up 3.42% to $48.73 today. The chip maker initially pulled back with the announcement of its new CEO yesterday but quickly rebounded.