$SRPT bulls triple the money

Option traders are posting exponential gains on upside positions opened in Sarepta Therapeutics (SRPT) only a few weeks ago.

On June 17, Investitute’s proprietary programs found that 2,500 Weekly $130 calls expiring on July 5 were bought for $7.43 as part of a highly bullish spread with shares at $124.45. This was clearly a new position, as open interest in the strike was a mere 19 contracts before that session began.

Those calls traded up to $26.45 today, more than 3.5 times their purchase price. The stock rose 24.54% 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 14.27% to $148.28 in midday trading. The drug maker’s stock spiked higher this morning after Pfizer (PFE) reported negative clinical results for a rival treatment to Sarepta’s experimental therapy for Duchenne muscular dystrophy.