$ENDP call prices rocket 14-fold

Endo continued its tremendous run higher today after strong quarterly results.

On June 6,  Investitute’s market scanners identified the purchase of 2,400 October $9 calls for $0.55 with shares at $7.35. Volume was well above the strike’s open interest of 85 contracts, indicating that this was fresh buying.

Those October $9 calls sold for $8 this morning, more than 14 times their initial purchase price. The stock rallied 130.8% in the same time period, an enormous move but still far 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.

ENDP soared 27.19% today to close at $16.09. This morning the pharmaceutical company, known for its Lidoderm and Percocet products, beat earnings estimates and raised guidance for the rest of the year.