Bulls keep filling up at $QSR

Restaurant Brands has rallied on strong quarterly results, handing more large gains on upside option positions.

On Dec. 13, Investitute’s tracking systems found that 12,010 Weekly $55 calls expiring on April 18 were purchased as part of a bullish roll for $3.40 to $3.60 with shares at $54.48. This was clearly a new position, as volume was well above the strike’s open interest of 6,743 contracts before the trade occurred.

Those calls sold for $9.20 this morning, more than 2.5 times their purchase prices. The stock rose 16.37% in the same time period, underscoring how options can far outperform their underlying shares.

It was the second winning trade in QSR posted on Investitute in as many weeks. Earlier this month Investitute co-founder Jon Najarian cited buying in the February $50 calls on CNBC’s “Halftime Report,” which have nearly quadrupled in value.

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.

QSR was up 1.66% today to close at $63.65. Shares of company, which operates the Burger King, Popeyes, and Tim Hortons chains, rose 9.78% yesterday after management pre-announced positive quarterly results and changes to its corporate structure.