Options News
$NVDA bulls double money
A New Year’s Eve trade in Nvidia has yielded large profits on bullish option positions. On Dec. 31, Investitute’s tracking systems detected the purchase of 2,250 March $130 calls in one print for $15.45 with shares at $133.15. Open interest in the strike was only 374 contracts before the trade occurred, showing that it was […]
A New Year’s Eve trade in Nvidia has yielded large profits on bullish option positions.
On Dec. 31, Investitute’s tracking systems detected the purchase of 2,250 March $130 calls in one print for $15.45 with shares at $133.15. Open interest in the strike was only 374 contracts before the trade occurred, showing that it was a new position.
Those calls traded for as much as $31.70 today, more than twice their purchase price. The stock rose 21.4% in the same time period, 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.
NVDA jumped 6.97% to $161.14 today. This morning the graphics-chip maker announced that it would acquire semiconductor company Mellanox (MLNX) for $6.9 billion. (See related story on winning trade in MLNX)