Bulls triple their money in $EXEL

Option traders turned large profits in Exelixis only a few days after opening upside positions in the name.

On Oct. 30, the eve of its quarterly results, Investitute’s proprietary programs flagged the purchase of 10,000 February $16 calls for $1.18 as part of a bullish roll with shares at $14.22. It was the second consecutive session of buying at that strike.

Those calls traded up to $3.80 today, more than 3 times their purchase price. The stock surged 31.43% today, a huge move but still nowhere near that of its options on a relative basis.

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.

EXEL spiked 16.45% to $17.41 today. The biotechnology company beat earnings and revenue estimates after the market closed yesterday.