$PFE bulls double their money

Option traders who opened upside option positions in Pfizer at the beginning of this week have already posted sizable gains.

On Oct. 15, Investitute’s tracking systems detected the purchase of 7,500 November $45 calls for $0.40 to $0.54 with shares at $43.16. Volume was well above the strike’s open interest of 5,054 contracts, indicating that this was fresh buying. On CNBC’s “Halftime Report” last week, Investitute co-founder Pete Najarian cited bullish option activity in Pfizer even as the market dropped sharply.

Those calls traded for $0.90 today, twice their average purchase price. The stock rose 4.15% in the same time frame, showing how quickly options can far outpace gains in their underlying shares. It was the third winning trade in the name posted on Investitue in last two months.

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.

PFE was up 1.46% to $44.57 today. The drug giant pulled back with the broader market last week but has rebounded back to levels near all-time highs.