Call prices quadruple overnight in $CEMI

Option traders who opened upside positions in Chembio Diagnostics (CEMI) yesterday are piling up fast profits today.

On Jul. 21, Market Rebellion’s Unusual Activity Service found that 2,800 August $5 calls were bought for $0.45 to $0.75 above the previous open interest of just 1,860 with shares at $3.96.

Those calls traded for as much as $3.00 today, more than 4 times their purchase prices. The stock rose 125.49% in the same time frame, illustrating the kind of leverage that can be achieved with options.

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.

CEMI was last higher by 8.71% at $5.80 this afternoon. The company announced today its receipt of a $4M purchase order from the Partnership for Supply Chain Management, after reporting yesterday a $28.3M purchase order for DPP SARS-CoV-2 antigen tests in Brazil.