A huge trade in Anheuser-Busch last week is already paying off.
On April 19, Investitute’s proprietary tracking program found that 30,000 September $125 calls were bought in one print for $1.40 while shares traded for $109.99. This was clearly a new purchase, as open interest in the strike was only 1,451 contracts before the position appeared.
Today those calls traded for $1.80, a gain of nearly 30 percent in less than a week. The stock is up only 2.3 percent by comparison in that same time frame, highlighting 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. But the contracts can quickly lose value if the stock stalls or pulls back.
BUD closed higher by 3.94 percent today to close at $112.55. The Belgium-based beer giant benefited from a strong rally, particularly in Europe, after the weekend French election.