Bulls make big profits with $PFE calls

Patient option traders are posting big profits today on bullish positions opened in Pfizer (PFE).

On Aug. 2, Market Rebellion’s Unusual Activity scanners identified the purchase of 2,500 December $49 calls, expiring this Friday, for $0.60 with shares at $43.64. This was clearly a new position, as volume was clearly above the strike’s previous open interest of 400 contracts.

Those calls sold for as much as $9.10 today, more than 15 times their purchase prices. The stock rose 33.23% at the same time, underscoring how quickly 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.

PFE was last higher on the session by 4.32% at $57.94.