Bullish option traders who opened upside call positions in Advanced Micro Devices (AMD) on Monday are making big gains today.
On May 22, Market Rebellion’s Unusual Activity Service found that 17,000 Weekly $110 calls, expiring today, May 26,, were bought for $0.52 to $1.32 above open interest of 7,907 contracts with shares at $104.20.
Those calls have traded traded for as much as $17.00 this session, a 1,187.88% return, while the stock rose 21.9% in the same time frame, 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.
AMD was last up on the day by 4.34% to $125.57.
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