$AXSM bulls keep on winning

Bullish option traders keep on winning with upside positions in Axsome Therapeutics (AXSM).

On Dec. 3, Market Rebellion’s Unusual Activity Service found that 10,000 January $50 calls were bought in one print for $10.80, as part of a bullish roll, with shares at $42.94. This was clearly a new position, as open interest in the strike was just 187 contracts before that session began.

Those calls traded for as much as $39.50 just after this morning’s opening bell, over 3.5 times their purchase price. The stock rocketed 97.51% in the same time period, a huge move but still well below that of their options on a relative basis.

It is the fourth winning trade in the name to be posted on Market Rebellion year-to-date.

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.

AXSM posted an all-time high of $88.00 in earlier and is currently marked up 64.26% at $76.86. The drug maker announced this morning that its oral NMDA receptor antagonist, AXS-05, met the primary endpoint in Phase 3 trials.