Calls triple overnight in $PFE

Option traders are posting large profits today on bullish positions opened in Pfizer (PFE) only one session earlier.

Just yesterday, Market Rebellion’s activity scanners found that 4,500 Weekly $37.50 calls expiring this Friday were bought for $0.33 to $0.53 with shares at $37.32. This was clearly fresh buying, as open interest in the strike was only 1,543 contracts before the activity appeared.

Those calls have traded for as much as $1.28 so far today, about 3 times their average purchase price. The stock rose 3.72% 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 2.98% to $38.39 this morning. The drug maker beat earnings and revenue estimates before the market opened today.