$GILD bulls quadruple their money

Option traders have racked up big profits on Gilead as Wall Street analysts turn increasingly bullish on the name.

On Nov. 3, Investitute’s proprietary programs flagged the purchase of 3,100 March $80 calls for $2.36 to $2.55 with shares at $73.38. Volume was well above the strike’s open interest of 1,303 contracts, showing that these were new positions.

Today those calls sold for $10.32, more than 4 times their purchase prices. The stock rose 21.% in the same time period, an impressive move but nowhere near that of its 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.

GILD was up 3.91% today to close at $88.80. Jefferies upgraded the drug giant to “buy” from “hold” on Friday and raised its price target to $95 from $87, following a similar bump from Wells Fargo in the previous week. The company is scheduled to report earnings after the market closes on Feb. 6.