$CCXI calls roar 10-fold

It took just one week for bullish option traders to see their positions roar higher in ChemoCentryx (CCXI).

On Nov. 19, Market Rebellion’s Unusual Option Activity Service identified the purchase of 6,000 December $10 calls in two prints for $2.45, as part of a bullish spread, with shares at $8.72. This represented fresh buying, as volume was well above the strike’s previous open interest of 4,676 contracts.

Those calls have traded for as much as $26.45 this morning, more than 10 times their purchase price. The stock rallied 319.15% in the same time frame, a huge move but nothing like 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.

CCXI is currently up 283.57% to $30.92. The biopharmaceutical company announced positive topline data from the pivotal Phase III ADVOCATE trial of avacopan, an orally-administered selective complement 5a receptor inhibitor, after the market closed yesterday.