$ABBV bulls make quick overnight gains

Option traders turned large gains in AbbVie (ABBV) overnight.

Just yesterday, Our tracking systems identified the purchase of 2,000 Weekly $66.50 calls expiring this Friday, 23August, for $0.25 to $0.85 with shares at $66.76. This was clearly a new position, as open interest in the strike was only 342 contracts before the activity appeared.

Those calls have traded up to $2.16 this morning, more than 8 times their initial purchase price. The stock rose 2.52% 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.

ABBV is currently higher on the session by 2.61% to $68.30. The pharmaceutical company has traded higher after Piper Jaffray upgraded the name to Overweight with an $80 price target this morning.