$ABT call buyers turn quick profits

It took less than a week for traders to quadruple their money in Abbott Laboratories,

On Monday, Investitute’s market scanners identified the purchase of 9,200 February $60 calls for $0.91 to $1.25 with shares at $59.47. These were clearly new positions, as volume was far above the strike’s open interest of 2,261 contracts.

This morning those calls sold for $4.25, more than 4.5 times their original price. The stock rose 7.6% in the same time frame, 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.

ABT was up 2.43% today to close at $63.22. The pharmaceutical company received upgrades this morning from several firms, including Stifel, Leerink, William Blair, and BMO Capital. Price targets were raised as high as $71.