$QQQ call prices turn 5-fold

Option traders posted huge gains on upside positions in the tech-heavy PowerShares QQQ Fund today as earnings helped lift it to a new all-time high.

On Mar. 14, Investitute’s proprietary systems showed that 12,000 May $184 calls were purchased for $1.54, as part of a bullish roll, with shares at $177.05. Open interest in the contract was only 4,756 before the session began, indicating that this was fresh buying.

Those calls sold for as much as $8.09 today, more than 5 times their purchase price. The stock rose 8% 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 print a new all-time high of $191.32 before pulling back to close at $191.02, up 0.19% on the session. The exchange-traded fund reflects the Nasdaq 100 Index, which has seen its components gain on earnings.