Healthy profits keep coming from $BMY

Bullish option traders are logging more healthy profits in Bristol-Myers Squibb (BMY) today.

On Nov. 26, Market Rebellion’s Unusual Activity Service detected the purchase of 6,700 December $57 calls for $0.78 to $1.03 with shares at $56.33. Volume was well above the strike’s previous open interest of just 810 contracts, showing that this was a new position.

Those calls have traded for as much as $6.20 today, more 6 times their average purchase prices. The stock rose 12.2% in the same time period, underscoring how options can far outperform their underlying shares.

It is the second winning trade in the name to be posted on Market Rebellion this month.

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.

BMY is up 0.48% to $63.14 in afternoon trading. The drug maker received approval from the European Commission earlier for its Revlimid/rituximab combination.