Sarepta traders double their money

Strong sales resulting in large returns on bullish option positions in Sarepta Therapeutics today.

On June 21, Investitute co-founder Jon Najarian noted that 1,000 August $39 calls were bought in one print for $2.25 with shares at $34.65. Open interest in the strike was just 75 contracts before the trade occurred, showing that it was a new position.

Those calls traded up to $6 today, doubling in value. The stock rose 27.1 percent in the same time period, an impressive gain but nowhere near the move 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.

SRPT rose 6.06 percent to $43.41 today. In its quarterly report after Wednesday’s close, the biopharmaceutical company reported revenue that far exceeded expectations thanks to its Duchenne muscular dystrophy drug.