$INTC call prices triple in days

Intel rocketed higher today, yielding substantial gains on upside option positions opened only four sessions ago.

On Oct. 25, Investitute’s tracking systems showed that 9,000 Weekly $45 calls expiring on Nov. 2 were purchased for $0.93 as part of a bullish roll with shares at $43.85. Another 7,700 lot of those same Weekly $45 calls were purchased, as part of another roll, mere minutes after for $0.92 with shares fractionally lower at $43.76. Open interest in the strike was a just 1,059 contracts before the trade occurred, showing that these were clearly new positions. Investitute co-founder Jon Najarian cited the unusual activity at that time, ahead of the company’s earnings report.

Those calls traded for as much as $3.00 today, better than triple their purchase prices. The stock rose 9.1% 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.

INTC ran higher all day to close just under its intraday high, with a gain of 5.26% at $47.79. The chip maker has rallied since reporting earnings after the closing bell on Oct. 25.