$WDC calls double overnight

Bullish option traders are racking up fast gains overnight in Western Digital (WDC).

Yesterday, on Jun. 29, Market Rebellion’s Unusual Activity programs flagged the purchase of 2,100 Weekly $42.50 calls expiring this Thursday, Jul. 2, for $0.80 to $0.85 as part of a bullish spread with shares at $42.05. This was clearly fresh buying, as open interest in the strike was only 33 contracts before that session began.

Those calls traded for as much as $1.98 so far today, double their purchase prices. The stock rose 5.16% at the same time, showing 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.

WDC was last trading at $43.74 this afternoon, up 4.17% on the session. Benchmark maintained its Buy rating and $60 price target on the shares after Micron’s (MU) Q3 report, pointing to NAND chip pricing growth and SSD sales.