Quick profits for $NVDA call buyers

Bullish option traders are racking up quick profits today in Nvidia (NVDA).

Fewer than 15 minutes into this morning, on Jan. 31, Market Rebellion’s Unusual Activity Service found that 16,000 Weekly $240 calls, expiring this Friday, were bought for $3.50 to $5.27 with shares at $235.57. This was clearly fresh buying, as open interest in the strike was just 13,352 contracts before the activity appeared.

Those calls traded for as much as $9.25 this session, about 2 times their average purchase price. The stock rose 3.99% at the same time, underscoring 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.

NVDA finished the session at $244.86, up 7.21% on the day.