Option traders cash in on $BSX

Boston Scientific (BSX) continues to deliver for option traders who opened bullish positions in the name.

On Nov. 11, Market Rebellion’s proprietary programs found that 2,600 Weekly $40.50 calls expiring this Friday were bought for $0.52 to $0.60 with shares at $40.26. This was clearly fresh buying, as open interest in the strike was a mere 125 contracts before the activity appeared.

Those calls traded for as much as $2.97 this morning, 5 times their average purchase price. The stock rose 7.58% at the same time, showing how quickly options can far outpace gains in their underlying shares.

It is the third winning trade in the name to be posted on Market Rebellion in less than a month.

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.

BSX reached its session high earlier this morning at $43.49 but has since pulled back to $42.38 in afternoon trade, still up 0.17% on the day. The medical-device manufacturer will participate in the Stifel Healthcare Conference tomorrow morning.