Traders have logged big wins in Anheuser-Busch recently, and today was no exception.
On March 7, Investitute’s tracking programs found that 15,000 May $115 calls were bought for $1.10 with the stock at $106.05. Open interest in the strike was a mere 266 contracts before the trade occurred, showing that it was a new position.
Today ended the session at $5.89–an astronomic gain of 435 percent, while shares advanced about 13.7 percent in that same time frame. The contrast illustrates the kind of leverage that can be achieved through options, as Investitute co-founder Pete Najarian pointed out on CNBC’s “Halftime Report” yesterday. BUD rose 0.93 percent to today, ending the session at $120.58,
The trade followed another winning position in the name posted here on April 24. The Belgium-based beer conglomerate has rallied along with other European names leading up to this weekend’s presidential election in France. Anheuser-Busch has seen a string of large upside trades in recent weeks, as posted on Investitute’s proprietary Live Activity Log.
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.