A banner day for Cerner call buyers

Traders turned huge profits in only one day as Cerner posted strong quarterly results.

Just yesterday afternoon, Investitute’s market scanners showed that traders purchased 5,000 May $62.50 calls for $0.85 to $1.05 and 3,800 May $65 calls for $0.35 to $0.45. Shares were trading around $60.14 at the time.

Those calls traded for $3.80 and $1.90, respectfully, by the end of today’s session–roughly quadrupling in value just 24 hours later. Cerner’s shares gained 7.7 percent by contrast, showing the kind of leverage that options can achieve.

Long calls lock in the price where the stock can be purchased, gaining with a rally and providing leverage to the underlying shares. But the contracts can quickly lose value if the stock stalls or pulls back.

CERN surged 7.81 percent to finish today at $64.75. The health-care technology company gapped higher at the open after beating estimates on the top and bottom lines yesterday evening.