$MRNA option bulls log major gains

Option traders are posting exponential gains on upside positions in Moderna (MRNA) today.

On Jun. 21, Market Rebellion’s Unusual Activity Service found that 3,000 Weekly $235 calls, expiring next Friday, were bought for $3.75 to $4.50 above the previous open interest of just 16 with shares at $207.83.

Those calls have changed hands for as much as $51.56 so far today, more than 11 times their purchase price. The stock rose 37.5% in the same time period, underscoring 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.

MRNA is up 9.05% to $283.18 this afternoon. The drug maker will be added to the S&P 500 index, replacing Alexion (ALXN), the morning of Jul. 21.