AMD calls return 300% in one day

Bullish option traders didn’t have to wait long to see exponential profits in Advanced Micro Devices

Just yesterday, Investitute’s market scanners showed that 9,200 Weekly 12.50 calls expiring this Friday were purchased for $0.09 to $0.17 with shares at $12.08. Volume was above the strike’s open interest, indicating that this was fresh buying.

Those calls traded up to $0.57 today, gaining more than 300 percent just 24 hours later. The stock was pu less than 7 percent at the same time, showing 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.

AMD jumped 5.95 percent today to close at $12.64 after rising almost to $13 earlier in the session. The chip maker was hit hard along with other semiconductor companies when the tech sector sold off on June 9, but it has been rebounding this week.