Bullish option traders are seeing big profits today in NVIDIA Corporation (NVDA).
Yesterday on May 24, Market Rebellion’s Unusual Option Activity Service found that 6,317 Weekly $312.50 calls, expiring this Friday, were bought for $5.50 as part of a bullish spread with shares at $298.81. This was clearly fresh buying, as open interest in the contract was just 3,206 before the activity appeared.
Those calls have traded for as much as $80.72 this session, a 1,367.64% return, while the stock rose 31.6% 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 $387.69, up 26.95% on the day.
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