Upside option traders turned exponential gains today thanks to strong quarterly results from Agilent.
Back on April 17, Investitute’s tracking systems detected the purchase of 2,500 August $55 calls for $2.10 and $2.15 with shares at $53.39. This was clearly a new position, as open interest in the strike was just 308 contracts before the trade occurred.
Those calls traded up to $7.55 this morning, representing a profit of more than 255 percent on average. The stock rose 16.1 percent in the same period, illustrating the kind of leverage that can be achieved through options.
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.
A jumped 4.65 percent to $62.14 today. The manufacturer to medical-diagnostics equipment raised its outlook after beating estimates on the top and bottom lines when the market closed yesterday.