$AXSM bulls double their money

Option traders have again turned large profits on upside positions in Axsome Therapeutics (AXSM).

On Nov. 21, Market Rebellion’s Unusual Activity Service found that 10,076 January $40 calls were bought for $6.05, as part of a bullish roll, with shares at $33.77. This was clearly a new position, as open interest in the strike was just 3,033 contracts before that session began.

Market Rebellion co-founder Jon Najarian cited the activity while choosing AXSM as his final trade at the time on CNBC’s “Halftime Report.”

Those calls traded for as much as $16.00 this morning, over 2.5 times their purchase price. The stock rocketed 38.1% in the same time period, a huge move but still well below that of their options on a relative basis.

It is the third winning trade in the name to be posted on Market Rebellion year-to-date.

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.

AXSM posted an all-time high of $47.24 in early morning trading and is currently marked up 11.61% at $44.22. The drug maker announced this morning that its narcolepsy treatment, AXS-12, met the primary endpoint in trials.