$BMY call prices double in days

Bullish option traders are logging quick profits in Bristol-Myers Squibb (BMY) today.

On Tuesday, Dec. 3, Market Rebellion’s Unusual Activity Service detected the purchase of 2,800 Weekly $56.50 calls expiring on Dec. 13 for $1.40 to $1.57  with shares at $57.33. Volume was well above the strike’s previous open interest of just 12 contracts, showing that this was a new position.

Those calls have traded for as much as $3.05 today, more than double their average purchase prices. The stock rose 3.61% in the same time period, underscoring how options can far outperform their underlying shares.

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.

BMY is up 0.73% to $59.33 in midday trading. The drug maker reported earnings on Oct. 31, and made a new 52-Week high of $59.49 earlier this session.