$NVDA call buyers score big profits

Bullish option traders are racking up big profits today in Nvidia (NVDA).

On Mar. 15, Market Rebellion’s Unusual Activity Service found that 10,700 March $230 calls, expiring today, were bought for $1.73 to $4.35 with shares at $218.18. This was clearly fresh buying, as open interest in the strike was just 8,456 contracts before the activity appeared.

Those calls have traded for as much as $27.80 this session, at least 6 times their purchase prices. The stock rose 18.14% at the same time, underscoring how quickly 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.

NVDA was last at $257.78 this morning, up 4.08% on the day.