Bulls triple their money in $ARRY

Upside option traders are making huge profits in Array BioPharma ahead of a key data presentation next month.

On Aug. 8, Investitute’s proprietary programs cited 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, open interest in the strike was 2,673 contracts before the trade occurred.

Today those calls sold for $1.47, nearly tripling in value. The stock rose 24.8 percent in the same time frame, 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.

ARRY jumped 5.88 percent today to close at $9.54 after reaching $10 earlier in the morning. The drug maker is scheduled to release clinical-trial results on various cancer treatments at the European Society for Medical Oncology in September.