$ARRY call prices soar 7-fold

Bullish option traders have racked up huge profits today as Array BioPharma (ARRY) spiked higher on buyout news.

On Feb. 14, Investitute’s market scanners identified the purchase of 5,000 June $25 calls for $2.85 as part of a bullish roll with shares at $21.71. This was clearly a new position, as volume was more than double the strike’s open interest before that session began.

Those calls traded for $21.40 this afternoon, 7.5 times their purchase price. The stock skyrocketed 113.77% at the same time, but even that enormous move was nowhere near that of its options on a relative basis.

It is the second winning trade in the name posted on Investitute in as many weeks.

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 is up 57.11% to $46.49 in afternoon trading today. Pfizer announced this morning that it was acquiring the biopharmaceutical company in an $11.4 billion deal.