Option traders scored big today as Halozyme Therapeutics rallied sharply on several catalysts.
On Aug. 9, Investitute’s proprietary programs showed that 2,000 December $13 calls were purchased for $1.15 with shares at $12.82. This was clearly a new position, as open interest in the strike was only 754 contracts before the trade occurred.
Those calls rose to $3 this morning, more than doubling in value. The stock was up 22.5 percent in the same time period, underscoring the kind of leverage that can be achieved with options.
Long calls lock in the price where a 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.
HALO soared 21.24 percent to $15.98 today. The stock spiked higher this morning after the drug maker raised full-year guidance and annnounced partnerships with Bristol-Myers Squibb and Roche.