$BBIO option bulls find big gains

$BBIO option bulls find big gains

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BridgeBio Pharma Inc (BBIO) has rallied this morning, delivering big gains to bullish option positions.

On Jun. 21Market Rebellion’s Unusual Option Activity Service found that 6,500 August $17.50 calls were bought as part of a bullish spread for $3.90 to $4.30 with shares at $16.27. This was clearly fresh buying, as open interest in the contract was just 3,437 before the activity appeared.

Those calls have traded for up $14.00 today, a 225.58% return, while the stock surged 92.69% in the same time period, an enormous move but one that was still dwarfed by the gain of its options 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.

BBIO was last at $31.91, up 75.14% on the session.

Ready to start trading? Try Unusual Option Activity Essential. Learn how you can follow the “smart money” with a fresh UOA trade idea each week – including technical levels so that you know how to manage each trade!

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