Call buyers give Agilent an ‘A’

Agilent523

Bullish option traders doubled their money on Agilent’s strong quarterly results.

On April 17, Investitute’s market scanners detected the purchase of 2,500 August 55 calls at the same time for $2.10 and $2.15 with shares at $53.39. Open interest in the strike was only 308 contracts before the trade occurred, showing that it was a new position.

Today those calls sold for $5.45, more than double their original price. The stock was up less than 12 percent in the same time, illustrating how options can 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.

A rose 4.6 percent today to close at $58.66. The medical-diagnostics company raised its outlook after surpassing earnings and revenue estimates yesterday afternoon.

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Mike Yamamoto | Investitute

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