$AMGN bulls double their money

Bullish option traders collected big profits in Amgen (AMGN) calls today.

On July 23, Investitute’s proprietary programs flagged the purchase of 4,120 Weekly $182.50 calls, expiring on 09August, for $1.88 as part of a bullish spread and roll with shares at $176.32. This was clearly fresh buying, as open interest in the strike was only 238 contracts before the trades occurred.

Those calls have so far sold for as much as $4.12 today, more than twice their purchase price. The stock has risen 4.86% at the same time, illustrating the kind of leverage that can be achieved with options.

Long calls lock in the price where a stock can be purchased, gaining with a rally and providing leverage to the underlying shares. The contracts can quickly lose value if the stock stalls or retreats but also carry less risk than owning the shares themselves.

AMGN is currently trading higher on the session by 4.73% at $184.78. Shares rose after the drug maker reported earnings after the closing bell last night, beating on both its top and bottom lines and raising the lower end of its fiscal year guidance.