Bulls feast on profits in $QSR

Option traders have nearly doubled their money in Restaurant Brands in the last week.

On Jan. 3, Investitute’s market scanners identified the purchase of 2,000 February $50 calls for $3.75 as part of a bullish spread with shares at $51.67. Open interest in the strike was only 105 contracts before that session began, showing that this was a new position. Investitute co-founder Jon Najarian cited the unusual activity at that time on CNBC’s “Halftime Report.”

Those calls traded for as much as $6.57 today, almost double their purchase price. The stock rose 7.86% in the same time frame, illustrating the kind of leverage that can be achieved quickly 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.

QSR was up 1.15% to $55.40 today. The company, which operates the Burger King, Popeyes, and Tim Hortons chains, was initiated with a “buy” rating and a $70 price target at SunTrust last night.