$NVDA calls triple overnight

It took only session for bullish option traders to rack up large profits in Nvidia (NVDA).

Just yesterday, Market Rebellion’s Unusual Activity Service flagged the purchase of 6,800 February $310 calls for $1.50 to $3.75 with shares at $308.61. This represents fresh buying, as open interest in the strike was 3,894 contracts before the trades appeared.

Those calls have traded for as much as $7.50 so far today, about 3 times their average purchase price. The stock rose 2.5% 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 is off 0.11% to $314.40 this morning. Bernstein upgraded the graphics-chip maker to “outperform” from “market perform” yesterday and raised its price target to $360 from $300.