$MRK bulls score

Option traders are scoring exponential gains today on upside positions in Merck (MRK) opened last month.

On Mar. 18, Market Rebellion’s Unusual Activity Service found that 2,700 Weekly $85 calls, expiring Apr. 29, were bought for $0.49 to $0.53 above the existing open interest of 16 contracts with shares at $78.95.

Those calls traded for up to $2.15 so far this this session, over 4 times their purchase prices. The stock rose 8.02% in the same time frame, underscoring how quickly options can dwarf gains in their underlying shares 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.

MRK was last up 0.52% to $83.90 in afternoon trade.