Bulls score again in $MDCO

Option traders have logged huge gains in Medicines Company (MDCO) for the second time in less than a week.

On Nov. 19, Market Rebellion’s Unusual Activity Service flagged the purchase of 3,405 January 75 calls bought for $5. The trade was part of a bullish spread with shares at $69.88.

Those calls were sold for as much as $9.50 today, just shy of twice their purchase price. The stock rose 20.21% in the same time frame, illustrating the kind of leverage that can be achieved with options.

It is the second winning trade in the name posted on Market Rebellion since Nov. 19.

Long calls lock in the price where a stock can be purchased, gaining with a rally and providing leverage to the underlying shares. The contracts can quickly lose value if the stock stalls or pulls back but also carry less risk than owning the shares themselves.

MDCO is up 22.38% to $83.89 in early trade today. Swiss drug giant Novartis (NVS) announced yesterday that it plans to purchase the biopharmaceutical company for $9 billion.