$QCOM calls up 6-fold overnight

Option traders posted huge profits today on bullish positions opened in Qualcomm only one session earlier.

Just yesterday, Investitute’s proprietary programs showed that 2,500 Weekly $56 calls expiring Dec. 7 were purchased for $0.49 to $0.63 as part of a bullish roll with shares at $55.15. This was clearly a new position, as open volume was more than double the previous open interest of 1,187 contracts in that strike.

Those calls traded for as much as $3.20 today, more than 6 times their purchase prices. The stock rose 6.98% at the same time, 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 2.58% to $58.11 today. Shares rallied in post-market trading yesterday after Bloomberg reported that former CEO Paul Jacobs is still considering a bid to take the company private.