$EXAS bulls double their money

Exact Sciences spiked higher today on strong quarterly results, yielding big profits on option positions opened last week.

On Oct. 23, Investitute’s tracking systems detected the purchase of 7,500 January $80 calls at the same time for $1.85 to $2.10 with shares at $63.38. This was clearly fresh buying, as volume was far above the strike’s open interest of 1,803 contracts before that session began.

Those calls sold for $4.60 this morning, more than twice their purchase prices. The stock rose 19.36% in the same time frame, illustrating the kind of leverage that can be achieved quickly with options.

Long calls lock in the price where a stock can be purchased, gaining with a rally and providing leverage to the underlying shares. The contracts can quickly lose value if the stock stalls or pulls back but also carry less risk than owning the shares themselves.

EXAS surged 10.33% today to close at $71.05. The medical-diagnostics company, which produces the colon-cancer test Cologuard, surpassed earnings and revenue expectations after the market closed yesterday.