Bulls quadruple money in $PFE

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

On Oct. 28, Market Rebellion’s Unusual Activity scanners identified the purchase of 4,500 November $36.50 calls in two prints for $1.20 with shares at $35.69. This was clearly a new position, as volume was clearly above the strike’s previous open interest of 612 contracts.

Those calls have traded for as much as $5.70 so far today, more than 4 times their purchase prices. The stock rose 16.42% 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 up 10.25% to $40.13 this afternoon. The drug maker and BioNTech SE (BNTX) announced that their mRNA based vaccine against COVID-19 was found to be over 90% effective in preventing the virus.