$QQQ bulls double their money

Option traders posted huge gains on upside positions in the tech-heavy PowerShares QQQ Fund as it continued its rebound today.

On Nov. 23, Investitute’s proprietary systems showed that 5,000 December $162 calls were purchased for $3.80 with shares at 160.19. Open interest in the contract was only 3,120 before the session began, indicating that this was fresh buying.

Those calls traded up to $9.28 today, nearly two-and-a-half times their purchase price. The stock rose 5.9% in the same time period, a large move for the index but 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.

QQQ climbed steadily throughout the day to close at $169.21, up 0.63% on the session. The exchange-traded fund reflects the Nasdaq 100 Index, which lifted throughout the day ahead of positive expectations of the G20 summit.