$BB bulls score big in one week

BlackBerry (BB) surged today, yielding large returns on upside option positions opened at the end of last week.

Last Friday, Jan. 8, our Unusual Activity scanners identified the purchase of 5,600 January $8 calls expiring today for $0.11 to $0.23 above open interest of just 2,045 contracts with shares at $7.27.

Those calls traded up to $3.50 today, more than 15 times their purchase prices. The stock rose 58.46% at the same time, showing how options can quickly outperform their underlying shares by a wide margin.

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.

BB spiked to a new 52-Week high of $11.56 today and at the close was up 8.01% at $9.84. The communications-software company intends to sell some of its patents to Huawei, reported earlier this week.