$BMY call prices spike 5-fold

Bullish option traders are logging huge profits in Bristol-Myers Squibb (BMY) today.

On Sept. 12, Market Rebellion’s tracking systems detected the purchase of 7,871 December $52.50 calls for $1.14 as part of a bullish roll with shares at $49.98. Volume was above the strike’s previous open interest of 6,543 contracts, showing that this was a new position.

Those calls traded for as much as $6.10 today, more than 5 times their purchase price. The stock rose 10.74% in the same time period, underscoring 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.

BMY is up 1.47% to $57.71 in midday trading. The drug maker’s earnings topped expectations this morning.