Call prices rocket sixfold in $LLY

Bullish option traders have racked up exponential gains in Eli Lilly.

On July 13, Investitute’s market scanners identified the purchase of 2,000 August $90 calls for $1.41 to $1.47 with shares at $89.05. Volume was well above the strike’s open interest of 1,133 contracts, showing that this was fresh buying.

Those calls sold for as much as $9.08 today, more than 6 times their purchase prices. The stock rose 11.14% in the same time frame, underscoring 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.

LLY was up 0.79% to $98.79 today. The pharmaceutical has been rallying since reporting strong quarterly results on July 24.