Bulls double money in $TECK

Option traders are seeing substantial gains in Teck Resources ahead of quarterly results.

On Feb. 20, Investitute’s proprietary programs flagged the purchase of 6,800 18April $24 calls for $0.60 to $0.75 with shares at $22.37. Open interest in the stock was a single contract before that session began, showing that was fresh buying. Investitute co-founder Pete Najarian cited the unusual activity at that time on CNBC’s “Halftime Report.”

Those calls traded for as much as $1.35 this afternoon, twice its average purchase price. The stock rose 13.05% in the same time period, illustrating the kind of leverage that can be achieved with options.

Long calls lock in the price where a 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.

TECK was up 3.24% to $25.21. The mining company is scheduled to report earnings on April 23 before the market opens.