$AG bulls triple their money

Upside option traders have seen the value of their positions triple today as First Majestic Silver (AG) approaches its recent 52-Week high.

On Monday, Aug. 19, Our tracking systems detected the purchase of 5,700 Weekly $10 calls expiring today from $0.20 to $0.40 with shares at $16.16. Open interest in the strike was a mere 296 contracts before that session began, showing that this clearly was a new position.

Those 23August $10 calls have traded for as much as $0.95 this morning, more than 3 times their average purchase price. The stock rallied 7.87% in the same time period, a large move but nowhere near that of its options on a relative basis.

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.

AG is currently trading just off its session high at $11.00, up 6.64% on the day. The Canadian silver miner’s shares have jumped alongside its peers and silver itself as trade concerns remain.