Upside option traders logged more profits as Array Biopharma rallied sharply for a second straight day.
On Wednesday, Investitute’s market scanners identified the purchase of 10,000 September $10 calls in one print for $0.65 with shares at $9.69. Volume was nearly double the strike’s open interest, showing that this was a new position.
Those calls traded up to $2.68 today, a gain of more than 300 percent in less than three full sessions. The stock rallied 23.5 percent in the same period, an impressive move but nowhere near that of its options. It was the second winning bullish trade for Array in as many days. The September $9 calls posted on Investitute yesterday are up more than 400 percent as of today.
Long calls lock in the price where the 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.
ARRY rose another 6.91 percent today to close at $10.98. The drug company surged after announcing positive results in clinical trials for its colorectal-cancer treatment ahead of a presentation at the European Society for Medical Oncology this weekend.