Bulls score big in $ARRY before meeting

Upside option positions in Array Biopharma are posting exponential gains ahead of an industry presentation by the company.

On Aug. 8, Investitute’s tracking systems detected the purchase of 10,000 September $9 calls for $0.50 and $0.55 with shares at $7.90 This was clearly a new position, as open interest in the strike was only 2,673 contracts before the trade occurred.

Today those calls traded for $1.65, more than tripling in value. The stock rallied 30.1 percent in the same period, a huge move but still one that was far below that of its options on a relative basis. Investitute co-founder Jon Najarian chose Array as his “final trade” on CNBC’s “Halftime Report” yesterday, citing even more unusual option activity in the name.

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.

ARRY jumped 4.16 percent to 10.27 today. The cancer-drug developer is scheduled to present clinical-trial results on its proposed melanoma treatment at the European Society for Medical Oncology this weekend.