Bulls score with $AZN

Good news in AstraZeneca (AZN) vaccine development is translating to big gains for upside option traders.

On Jun. 9, Market Rebellion’s Unusual Activity programs found that 3,435 September $60 calls were purchased for $1.10 with shares at $52.94. This was clearly a new position, as open interest in the strike was only 34 contracts before the activity appeared.

Those calls traded for up to $3.50 today, more than 3 times their purchase price. The stock rose 10.9% in the same time frame, underscoring the kind of leverage that can be obtained with options.

Long calls lock in the price where the 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.

AZN was up 7.45% today to close at $58.00. The pharmaceutical company was mentioned positively by ITV, noting initial trials of a COVID-19 vaccine being developed by Oxford and backed by AstraZeneca will have their first data published in the Lancet medical journal.