$MSFT calls double overnight

Option traders are reaping gains today on bullish positions opened in Microsoft (MSFT) only one session earlier.

On Aug. 16, Our tracking systems found that 10,600 Weekly $140 calls expiring this Friday were bought for $0.31 to $0.45 above open interest of 4,309 contracts with shares at $136.13. Co-founder Jon Najarian cited the unusual activity at that time on CNBC’s “Halftime Report.”

Those calls traded for as much as $0.76 this afternoon, twice their average purchase price. The stock rose less than 1.7% at the same time, 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.

MSFT is up 1.54% to $138.22 in afternoon trading. The software giant rose along with chip maker Nvidia (NVDA) after the two companies announced a partnership to improve graphics on Microsoft’s “Minecraft” game.