$JD bulls triple their money in hours

Option traders racked up exponential gains on upside positions in JD.com (JD) today.

Just this morning, Market Rebellion’s activity scanners found that 4,100 Weekly $36.50 calls expiring tomorrow, Jan. 3, were bought for $0.16 to $0.31 with shares at $36.36. This was clearly fresh buying, as open interest in the strike was only 2,276 contracts before the session began.

Those calls traded for as much as $1.07 just over three hours later, at least 3 times their purchase prices. The stock rose 3.25% in the same time period, underscoring how 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.

JD is up 6.5% to $37.52 in late-day trading. The Beijing-based e-commerce company is the fifth largest holding of the KraneShares CSI China Internet ETF (KWEB), which made a new 52-Week high today.