Why $ARRY bulls scored big gains

Option traders racked up huge profits in Array Biopharma today.

On Nov. 14, Investitute’s tracking systems detected the purchase 5,000 March $12 calls for $1 with shares at $10.37. Open interest in the strike was only 755 contracts before the trade occurred, showing that it was a new position.

Those calls traded for $4.90 today, nearly 5 times their purchase price. The stock has surged 61% in the same time period, a huge gain but still nowhere near that of its options.

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.

ARRY spiked higher by 15.54% today to close at $16.28. The biopharmaceutical company beat quarterly results this morning and released data showing significant survival rates in its melanoma drugs.