Calls surge as AstraZeneca rallies

Bullish traders have turned exponential profits in AstraZeneca.

On April 21, Investitute’s proprietary programs found that 5,200 May $32.50 calls were bought for $0.15 with shares at $29.71. Volume was well above the strike’s open interest of 3,184 contracts, indicating that this was new positioning.

This afternoon those calls traded for $1.55, a gain of more than 900 percent. The stock rallied 14.5 percent in the same time frame, an impressive move but nothing compared to the stratospheric rise in the 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.

AZN jumped 9.22 percent today to close at $34. The stock surged after a Leerink analyst reported promising results from a late-stage trial of AstraZeneca’s Imfinzi drug in the treatment of lung cancer.

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