Bulls triple their money in $ACB

Option traders scored big gains on upside positions in Aurora Cannabis (ACB) today.

On Feb. 2, Market Rebellion’s Unusual Option Activity Service identified the purchase of 11,600 Weekly $12.50 calls expiring this Friday, Feb. 5, for $0.22 to $0.47 with shares at $11.69. This represented fresh buying, as volume was well above the strike’s previous open interest of 2,561 contracts.

Those calls traded for as much as $1.70 today, more than 3.5 times their purchase prices. The stock rose 20.7% in the same time frame, illustrating how options can quickly 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.

ACB ended up 8.27% to $13.75 today. The medical-cannabis company has risen alongside its peers today while reform regulation is discussed in D.C.