$DRNA call prices triple

It took less than one week for option traders to triple their money on upside positions in Dicerna Pharmaceuticals (DRNA).

On Aug. 28, Market Rebellion’s Unusual Activity Scanners showed that 2,250 October $20 calls were bought for $0.65 with shares of $17.50. Open interest in the strike before that session began was only 48 contracts, signaling that this was fresh buying.

Those calls traded for as much as $2.02 today, more than triple their purchase price. The stock rose 6.8% in the same time frame, illustrating 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.

DRNA ended the session up 5.38% to $18.80 after trading as high as $19.37 earlier in the day. The biotechnology company’s CEO bought 10,000 of its shares on Sep. 1.