Skyworks calls trade higher

Skyworks Solutions (SWKS) has handed bullish option traders big profits today.

On May 15, Market Rebellion’s Unusual Activity tracking systems detected the purchase of 3,400 June 75 calls for $1.30 to $2.10 with shares at $68.57. Volume was clearly above the strike’s previous open interest of 2,777 contracts, indicating that this was fresh buying.

Those calls traded for up $7.40 today, a 252.38% return, while the stock rose 17.4% in the same time period, 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.

SWKS was last up 8.36% at $79.69 today.