$CCJ bulls double their money

Option traders are scoring big gains on upside positions in Cameco (CCJ) today.

On Mar. 27, Market Rebellion’s Unusual Activity Service identified the purchase of 20,000 June $7 calls for $0.95 as part of a bullish spread with shares at $6.77. This was clearly a new position, as open interest in the strike was only 195 contracts before the trade occurred.

Those calls changed hands for as much as $2.58 during this session, at least 2.5 times their purchase price. The stock rose 40.77% in the same time frame, 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.

CCJ traded up to $9.58 earlier this session and ended the day up bu 0.22% to $9.25. The uranium producer continued to trade higher off its recent lows today, despite withdrawing its 2020 outlook in response to the COVID-19 epidemic yesterday.