$WBA bulls score big gains

Walgreens Boots Alliance (WBA) has made a strong comeback this week, returning healthy gains on upside option positions.

Yesterday on Dec. 2, Market Rebellion’s Unusual Activity programs found that 3,300 Weekly $39.50 calls expiring tomorrow, Dec. 4, were bought for $0.39 to $0.50 with shares at $39.16. Volume was well above the strike’s existing open interest of 877 contracts, indicating that this was fresh buying.

Those calls traded for $4.75 today, at least 9.5 times their purchase prices. The stock rose by as much as 10.21% in the time frame, underscoring how quickly 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.

WBA closed up 7.48% today at $42.82. The drugstore chain’s shares today closed, to the upside, a technical gap left on Nov. 17 after Amazon (AMZN) announced Amazon Pharmacy.