$QGEN calls skyrocket 7-fold

Option traders have logged massive gains on bullish positions in Qiagen (QGEN).

On Nov. 4, Market Rebellion’s Unusual Activity Service identified the purchase of 3,000 January $31 calls for $1.35 to $1.90 with shares at $30.58. There was no open interest in the strike before the trades occurred, showing that this was new positioning.

Those calls are marked at $10.20 this morning, more than 7.5 times their purchase price. The stock rose 33.98% in the same time frame, a huge move but still nowhere near that of its options on a relative basis.

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.

QGEN is off 0.27% to $40.93 in early trade today. Shares rallied yesterday after the genetic-testing company said it is exploring several possible deals.