$AMRN calls double in hours

Option traders who opened bullish positions in Amarin (AMRN) this morning were reaping big profits by the afternoon.

About 10 minutes after the opening bell, Investitute’s tracking systems showed that 2,900 Weekly $22 calls expiring on July 26 were bought for $0.60 to $0.66 with shares at $20.27. This was clearly fresh buying, as open interest in the strike was a mere 84 contracts before the activity appeared.

Those calls traded for as much as $1.55 today, about 2.5 times their average purchase price, as volume swelled above 6,800 contracts. The stock rose 10% at the same time, illustrating the kind of leverage that can be achieved quickly 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 pulls back but also carry less risk than owning the shares themselves.

AMRN is up 15.12% to $22.15 in late-day trading. The drug maker raised its revenue outlook this morning after announcing expanded commercialization plans for its Vascepa treatment of cardiovascular disease.