$AMRN calls spike fourfold

Option traders have racked up exponential profits opened in Amarin (AMRN) just at the end of last week.

On May 24, Investitute’s market scanners found that 2,400 Weekly $19 calls expiring this Friday were bought for $0.22 to $0.27 with shares at $17.71. This was clearly fresh buying, as open interest in the strike was only 457 contracts before the activity appeared. Investitute co-founder Jon Najarian cited the unusual activity at that time on CNBC’s “Halftime Report.”

Those calls traded for as much as $0.90, more than 4 times their initial purchase price. The stock rose 10.84% in the same time frame, 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.

AMRN jumped 11.7% today to close at $19 even. The stock rallied after the Food and Drug Administration granted fast-track status to the pharmaceutical company’s Vascp fish-oil cholesterol pill for the prevention of heart attacks and strokes.