Option bulls pick profits from $AAPL

Option traders are picking big profits on upside positions opened in Apple (AAPL) last week.

On Apr. 5, Market Rebellion’s Unusual Options Activity service detected the purchase of 12,000 April $129 calls for $0.57 to 0.89 with shares at $123.83. This was clearly fresh buying, as open interest in the strike was just 2,961 contracts before the activity appeared.

Those calls have traded for as much as $5.71 thus far today, over 6 times their purchase prices. The stock rose 8.62% 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.

AAPL was last up by 2.2% to $134.12 in afternoon trade. The company is scheduled to report earnings on Apr. 28 after the close.