$IMMU calls soar 10-fold overnight

Traders who opened bullish positions in Immunomedics yesterday are already reaping huge returns.

Just yesterday, Investitute’s tracking systems detected the purchase of 6,900 May $19 calls for $0.30 to $0.40 with shares at $18.35. This was clearly fresh buying as volume was well above the strike’s open interest of 2,910 contracts.

Those calls traded for $3.20 this morning, more than 10.5 times their initial purchase price. The stock rose 20.9% at the same time, a large move but nowhere near 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.

IMMU jumped 7.12% to $20.90 today. The biopharmaceutical company rallied after announcing positive data on its proposed treatment for breast cancer.