$MRNA bulls triple their money

Option traders are posting exponential gains on upside positions in Moderna (MRNA) today.

On Jan. 16, Market Rebellion’s Unusual Activity Service flagged the purchase of 5,000 July $25 calls bought for $2.65 as part of a bullish roll with shares at $21.51. This was clearly a new position, as open interest in the strike was a mere 93 contracts before the trade occurred.

Those calls have changed hands for as much as $9.40 so far today, more than 3.5 times their purchase price. The stock rose 38.17% in the same time period, 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.

MRNA is up 23.86% to $29.43 this afternoon. The drug maker has shipped a potential coronavirus vaccine for testing.