$BMY calls turn quick gains

It took less than two weeks for traders to double their money in Bristol-Myers Squibb (BMY).

On Sept. 10, Market Rebellion’s proprietary programs flagged the purchase of 13,500 October $50 calls bought for $0.62 to $0.70 as part of a bullish spread with shares at $48.67. Volume was the above the previous open interest of 10,530 contracts, showing that it was a new position.

Those calls traded for as much as $1.57 today, more than twice their purchase prices. The stock rose 4.83% in the same time frame, showing how quickly options can far outperform moves in 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 0.24% to $50.69 in midday trading. The drug giant is scheduled to present at the European Society of Medical Oncology in Barcelona on Sept. 28.