$GILD bulls triple their money

Option traders are racking up large gains on upside positions in Gilead Sciences (GILD) today.

On Feb. 3, our Unusual Activity Service found that 3,000 Weekly $67 calls expiring this Friday were bought for $2.19 to $2.27 as part of a bullish roll above open interest of 41 shares with shares at $66.86. Market Rebellion founder Pete Najarian cited even more buying in the April $80 calls on CNBC’s “Halftime Report” Feb. 6.

Those calls have traded for as much as $6.95 so far today, more than 3 times their purchase prices. The stock rose 10.42% in the same time frame, underscoring 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.

GILD is up 4.12% to $72.57 in midday trading. The pharmaceutical giant has rallied on reports of potential progress on drugs to combat the coronavirus.