Bulls triple their money in $SRPT

Sarepta Therapeutics rallied sharply today, handing exponential profits to upside option traders.

On Aug. 22, Investitute’s proprietary programs found that 4,750 November $38 calls were purchased for $3.53 as part of a bullish spread with shares at $35.55. Open interest in the strike was only 642 contracts before the trade occurred, showing that it was a new position.

Today those calls sold for $10.50, tripling in value. The stock rallied 32.1 percent in the same time frame, a big move but one that still paled in comparison to the options on a relative basis.

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.

SRPT jumped 13.75 percent to $46.73 today. The shares surged after the drug maker released positive clinical-trial data on its proposed treatment for Duchenne muscular dystrophy.