Calls triple in $PFE

Option traders are posting large profits today on bullish positions opened in Pfizer (PFE) last Friday.

On Jun. 26, Market Rebellion’s Unusual Activity scanners identified the purchase of 4,400 Weekly $32.50 calls expiring next Friday, Jul. 10, for $0.53 to $0.74 with shares at $31.70. This was clearly a new position, as volume was clearly above the strike’s previous open interest of 113 contracts.

Those calls have traded for as much as $2.20 so far today, more than 3 times their purchase prices. The stock rose 8.83% at the same time, 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.

PFE is up 4.62% to $34.21 this afternoon. The drug maker reported early data from an ongoing Phase 1/2 study of mRNA-based vaccine candidate against SARS-CoV-2 this morning.