$QQQ call prices double in days

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

On May. 13, Investitute’s proprietary systems showed that 40,000 May $183 calls were purchased from $0.69 to $0.77 with shares at $178.83. Open interest in the contract was only 15,148 before the session began, indicating that this was fresh buying.

Those calls sold for as much as $1.57 today, more than twice their initial purchase prices. The stock rose 2.63% 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 $183.09, up 1.41% on the session. The exchange-traded fund reflects the Nasdaq 100 Index, which has seen its components rebound this week.