$ABBV traders are up 400% on calls

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Bullish option positions are seeing exponential returns on promising data from AbbVie.

On June 22, Investitute’s proprietary programs cited the purchase of 5,000 January $75 calls for $2.32 and $2.33 as part of a bullish roll with shares at $72.33. Volume was well above the strike’s open interest of 3,833 contracts, showing that this was a new position.

Those calls traded as high as $11.90 today, representing a profit of more than 400 percent. The stock rose 18.7 percent in the same time period, underscoring the kind of leverage that can be achieved through options.

Long calls lock in the price where the stock can be purchased, gaining with a rally and providing leverage to the underlying shares. The contracts can quickly lose value if the stock stalls or pulls back but also carry less risk than owning the shares themselves.

ABBV jumped 4.35 percent to $85.34 today. The drug maker rallied on positive test results for its proposed treatment of eczema.

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Mike Yamamoto

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