$QCOM calls skyrocket 15-fold

Bullish option traders collected huge profits in Qualcomm (QCOM) today.

Back on Feb. 25, Investitute’s tracking systems detected the purchase of 15,000 July $60 calls for $0.97 to $1.24 with shares at $53.40. This was clearly fresh buying, as open interest in the strike was only 2,615 contracts before that session began.

Those calls sold for as much as $17.50 today, more than 15 times their average purchase price. The stock soared 45.34% in the same time period, a huge move but still nowhere near that of its options on a relative basis.

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 rose to $79.39 just after the opening bell but has pulled back to $76.82 this afternoon, still up 1.52% on the session. Yesterday the Justice Department asked a federal appeals court to block enforcement of an antitrust ruling against the chip maker.