Options traders doubled their money in General Motors Corp. (GM - Get Report) calls on the back of a much better than expected earnings report.

On September 26, Investitute's market scanners identified the purchase of 4,000 November $34 calls for $1.36 to $1.39 with shares at $33.74. Volume was far above the strike's open interest of 146 contracts, showing that this was fresh buying.

These investors may have chosen to buy those calls, as opposed to the underlying shares of GM, as a form of portfolio protection, seeing as how at the time, General Motors, and most auto manufacturers, were near their 52-week lows. By purchasing these calls, investors could participate in the upside, but temper any downside should the stock to have fallen further.

Those November $34 calls traded for $3.22 Wednesday afternoon, more than twice their purchase prices. The stock rose 9.6% in the same period, illustrating 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.

GM was up 9.1% to close at $36.59 on Wednesday, October 31. The auto manufacturer's shares rallied that morning after its earnings report where a hefty beat on both the top and bottom lines rejuvenated investor confidence.