$T call prices rocket 8-fold

Bullish option traders are dialing up huge profits in AT&T (T) today.

On June 27, Market Rebellion’s scanners identified the purchase of 28,000 September $34 calls for of 22,423 from $0.45 to $0.53 with shares at $32.84. Open interest in the strike was 22,423 contracts before the trades occurred, showing that this was fresh buying.

Those calls traded for as $4.10 this morning, more than 8 times their average purchase price. The stock rose 15.8% in the same time period, underscoring how 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.

T is up 2.59% to $37.19 this afternoon. The telecom giant rallied this morning after activist fund Elliott Management disclosed that it owns $3.2 billion in the company’s stock and detailed a plan to double its share price.