$AMGN bulls quadruple their money

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

On July 31, Investitute’s proprietary programs flagged the purchase of 4,120 Weekly $190 calls, expiring on 30August, for $2.05 as part of a bullish spread and roll with shares at $184.10. This was clearly fresh buying, as open interest in the strike was only 26 contracts before the trades occurred.

Those calls have so far sold for as much as $8.00 this afternoon, more than 4 times their purchase price. The stock has risen 7.19% at the same time, illustrating the kind of leverage that can be achieved with options.

This winning position follows a previous winning trade in AMGN calls, discovered by Investitute on July 23.

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 7.23% at $198.62. Shares have spiked after a Court sided with Amgen over Novartis (NVS) in upholding the Enbrel patent, as reported by Bloomberg.