Bullish option traders are seeing fast profits today in NVIDIA Corporation (NVDA).
This morning on Feb. 7, Market Rebellion’s Unusual Option Activity Service found that 15,000 Weekly $220 calls, expiring this Friday, were bought for $2.24 to $3.30 with shares at $212.00. This was clearly fresh buying, as open interest in the contract was just 10,449 before the activity appeared.
Those calls traded for as much as $6.54 this session, about double their average purchase price. The stock rose 4.57% 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 $218.88, up 3.79% on the day.
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