Calls turn quick gains in $OPK

It took less than three days for bullish option traders to double their money in Opko Health.

On Monday, Investitute’s proprietary programs flagged the purchase of 2,020 September $3 calls for $0.65 and $0.70 with shares at $3.25. This was clearly a new position, as open interest in the strike was only 356 contracts before the activity appeared.

Those calls traded for $1.45 today, more than double their purchase prices. The stock rose 30.8% in the same time frame, a large move but still well below 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.

OPK rocketed 29.19% to $4.16 today. The diagnostics and pharmaceutical company topped quarterly expectations yesterday after the market closed.