$XLNX call prices triple overnight

Option traders posted big profits today on bullish positions opened in Xilinx just one session earlier.

Just yesterday, Investitute’s tracking systems detected the purchase of 4,400 June $70 calls for $0.56 to $0.75 with shares at $68.02. This was clearly fresh buying, as open interest in the strike was only 1,702 contracts before that activity appeared. Investitute co-founder Jon Najarian cited the unusual activity at that time on CNBC’s “Halftime Report” and updated the winning trade today.

The calls traded for $1.91 this afternoon, more than 3 times their initial purchase price. The stock rose 4% at the same time, showing how quickly options can far outpace gains in 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.

XLNX was up 3.32% to $70.37 today. The manufacturer of programmable chips rallied after analyst comments on their use in artificial intelligence this week.