Bulls triple their money in $EXAS

Option traders have already cashed in big money on short-term positions in Exact Sciences

On Jan. 2, Investitute’s market scanners found that 5,000 Weekly $63 calls expiring on Jan. 11 were purchased for $3.62 as part of a bullish spread with shares at $63.33. This was clearly a new position, as open interest in the strike was a mere 64 contracts before that session began.

Those calls traded for as much as $13.26 today, more than 3.5 times their purchase price. The stock rose 20.62% in the same time frame, showing 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.

EXAS was up 1.06% to $76.16 today. The medical-diagnostics company, which produces the colon-cancer test Cologuard, rallied after announcing a positive sales outlook yesterday.