$QCOM bulls triple money

It took just two sessions for option traders to post exponential gains on upside options in Qualcomm (QCOM) that expire this afternoon.

On Jan. 15, Market Rebellion’s Unusual Activity Service identified the purchase of 5,000 January $92 calls for $0.80 to $1.92 with shares at $9.03 to $92.68. This was clearly fresh buying, as open interest in the strike was 2,703 contracts before the activity appeared.

Those calls have traded for as much as $4.03 so far today, about 3 times their average purchase price. The stock rose 3.65% in the same time frame, illustrating the kind of leverage that can be achieved quickly 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.

QCOM is up 4.61% to $96.02 this afternoon, just off session highs. Citi upgraded the chip maker to “buy” from “neutral” this morning and raised its price target to $108 from $89.