$AUPH calls rocket higher

Bullish option traders are logging big profits in Aurinia Pharmaceuticals (AUPH) today.

On Nov. 14, Market Rebellion’s Unusual Activity Service flagged the purchase of 5,100 December $6 calls for $1.40 to $1.60 with shares at $5.20. Open interest in the strike was only 4,614 contracts before the trade occurred, showing that this was a new position.

Those calls have traded for as much as $4.30 so far today, nearly 3 times their average purchase price. The stock soared 63.46% in the same time frame, a huge move but still one that was dwarfed by that of its options on a relative basis.

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.

AUPH made a new 52-Week high earlier this session at $8.54 but has since pulled back to trade at $8.16, still up 2.19% on the session. The late clinical stage biopharmaceutical company announced yesterday that it will present data at the Keystone Symposia Conference on Islet Cell Biology later in January.