$BSX calls triple overnight

Boston Scientific (BSX) is paying off big for option traders who opened bullish positions in the name only one session earlier.

Just yesterday, Market Rebellion’s proprietary programs found that 4,700 Weekly $39.50 calls expiring this Friday were bought for $0.54 to $0.65 with shares at $38.90. This was clearly fresh buying, as open interest in the strike was a mere 127 contracts before the activity appeared.

Those calls traded for as much as $1.75 today, 3 times their average purchase price. The stock rose 6% at the same time, showing how quickly options can far outpace gains in 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.

BSX is up 5.71% to $40.36 this morning. The medical-device manufacturer topped earnings and revenue expectations this morning.