$QCOM bulls ring the register

Option traders posted huge profits today on two bullish positions opened in Qualcomm over the past month.

On Feb. 22, Investitute’s proprietary programs showed that 5,000 March 54 calls were purchased from $0.66 to $0.75 with shares at $52.78. This was clearly a new position, as the volume was well above the previous open interest of 423 contracts.

Then on Mar. 13, Investitute’s proprietary programs discovered 6,000 March 56 calls being purchased for $0.40, as part of a bullish roll, with shares at $55.77. This was also clearly a new position, as the volume was above the 4,957 contracts compiling the open interest.

Those March 54 calls traded for as much as $2.98 today, more than 4 times their purchase prices, while the March 56 calls traded to a high of $2.69, nearly 7 times their purchase price. The stock rose 7.26% and 2.21% respectively, from those initial purchases, 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.

QCOM was up 2.17% to close at $56.60 today. Shares traded higher all session until reaching an intraday high of $57.34 after a jury in a San Diego court ruled that Apple (AAPL) violated patents owned by Qualcomm and ordered the former to pay $31.6 million in damages to the latter.