$SRPT bulls double their money

Option traders are posting big gains on upside positions opened in Sarepta Therapeutics (SRPT) today.

On Nov. 22, Market Rebllion’s Unusual Activity programs found that 4,000 January $110 calls were bought for $9.12 as part of a bullish spread with shares at $106.75. This was clearly a new position, as open interest in the strike was a mere 824 contracts before that session began.

Those calls traded up to $23.00 today, more than 2 times their purchase price. The stock rose 24.68% in the same time frame, a large move but 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.

SRPT is up 2.19% to $130.73 in midday trading. The drug maker in the last week has been named by analysts at both BofA and BTIG as a top biotech pick for 2020.