$XLNX call buyers rack up gains

Bullish option traders have doubled their money in Xilinx.

On Sept. 28, Investitute’s proprietary programs flagged the purchase of 3,900 December $80 calls for $3.91 to $4.70 with shares at $80.20. These were clearly new positions, as open interest in the strike was only 372 contracts before the trades occurred.

Those calls sold for $9.35 this afternoon, more than twice their average purchase price. The stock rose 9.28% in the same time period, illustrating the kind of leverage that can be achieved with options.

Long calls lock in the price where a stock can be purchased, gaining with a rally and providing leverage to the underlying shares. The contracts can quickly lose value if the stock stalls or pulls back but also carry less risk than owning the shares themselves.

XLNX was up 1.9% to $86.99 today. The programmable-chip maker topped quarterly estimates and raised its outlook on Oct. 24.