$JD calls deliver another win for bulls

Option traders are again seeing large profits on upside positions, quadrupling their money in JD.com (JD) today.

Back on Sep. 30, Market Rebellion’s activity scanners found that 10,800 January $29 calls were bought for $2.06 to $2.17 with shares at $28.15. This was clearly fresh buying, as open interest in the strike was only 1,044 contracts before that session began.

Those calls traded for as much as $9.20 today, at least 4 times their purchase prices. The stock rose 35.49% in the same time period, underscoring how options can far outperform their underlying shares.

It is the second winning trade in the name posted on Market Rebellion in as many days.

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 1.86% to $38.43 in midday trading. The Beijing-based e-commerce company made a new 52-Week high of $38.54 earlier this session.