Patience pays in Anheuser-Busch

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Anheuser-Busch InBev saw several bullish option trades earlier this year, and now those positions are proving that they were worth the wait.

On April 19, Investitute’s tracking systems identified the purchase of 30,000 September $125 calls in one print for $1.40 with shares at $109.99. Open interest in the strike was only 1,451 contracts before the trade appeared, showing that this was a new position.

This morning those calls sold for $9.99, a gain of more than 600 percent. The stock rose 12.7 percent in that same time period, highlighting the kind of leverage that can be obtained with options. Investitute co-founders Jon and Pete Najarian cited the unusual option activity when it occurred this spring on CNBC’s “Halftime Report.”

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.

BUD rose 6.2 percent today to close at $122.84 after reporting strong international sales.

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Mike Yamamoto | Investitute

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