$QQQ call prices double

Option traders posted big gains on upside positions in the tech-heavy PowerShares QQQ Fund today.

On Nov. 25, Market Rebellion’s Unusual Activity scanners identified the purchase of 2,575 Weekly $305 calls, expiring today, for $3.81 as part of a bullish spread with shares at $295.74.

Those calls sold for as much as $9.05 today, more than twice their purchase price. The stock rose 6.19% 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 ended the day, and year, at $313.74, up 0.25% on the session and a new all-time closing high. The exchange-traded fund reflects the Nasdaq 100 Index.