Deep-in-the-money call buys back in May have outpaced gains in their respective underlying shares of Apple Inc. (AAPL)

On May 18, Investitute's proprietary programs found that 21,000 November $165 calls were purchased for $26.65 as part of a bullish roll-up from another in-the-money position, with shares at $186.85. Open interest in the strike before that session began was only 1,145 contracts, showing that this was clearly fresh buying.

Those investors likely purchased these calls to synthetically replicate a long position in the underlying shares of AAPL but with less capital laid out initially, with the potential for greater leverage and less risk than owning the stock outright.

Those November $165 calls traded for $58.55 Wednesday, more than two times their purchase prices. The stock rose more 19.4% in the same time frame, a huge move but still far below that of its options on a relative basis.

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.

Apple was up the morning of September 26 to an intraday high of $223.75 before pulling back to close down on the session by 0.8%, at $220.42. The iPhone and wearables manufacturer has outperformed the broader market with a slew of analyst upgrades, good earnings, and a new product cycle.

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