$PBYI call prices jump fourfold

Bullish option traders racked up exponential gains in Puma Biotechnology today.

On June 14, Investitute’s market scanners identified the purchase of 5,000 July $60 calls in one print for $1.70 with shares at $52.35. This was clearly a new position, as open interest in the strike was only 1,402 contracts before that session began.

Those calls traded for as much as $7.60 today, 4.5 times their purchase price. The stock rose 23.9% in the same time frame, underscoring how options can far outperform their underlying shares.

Long calls lock in the price where investors can buy a stock, letting them position for a rally at limited cost with the potential for significant leverage. They carry less risk than owning shares because the most that can be lost is the price of the options no matter how far the stock might fall.

PBYI spiked higher by 24.36% to $63.55 today. The drug developer rallied sharply after saying that the European Medicines Agency would likely approve its breast-cancer treatment.