Bulls make fast money with $PFE calls

Option traders are posting large profits today on bullish positions opened in Pfizer (PFE) on positive vaccine news.

On Nov. 30, Market Rebellion’s Unusual Activity scanners identified the purchase of 5,400 Weekly $39 calls expiring this Friday for $0.22 to $0.52 with shares at $37.84. This was clearly a new position, as volume was clearly above the strike’s previous open interest of 3,106 contracts.

Those calls traded for as much as $2.60 today, more than 5 times their purchase prices. The stock rose 9.41% 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 closed higher on the session by 3.55% at $40.80. The drug maker and BioNTech SE (BNTX) announced today that their mRNA based vaccine against COVID-19 received authorization for emergency use in the UK.