Bulls keep mining gains in $VALE

Vale (VALE) has been rallying in recent weeks, returning even more big profits on upside option positions today.

Back on Oct. 30, Market Rebellion’s Unusual Activity Service flagged the purchase of 2,263 Weekly $11 calls, expiring this Friday, Dec. 11, for $0.48 with shares at $10.70. There was no open interest in the contract, indicating that this was fresh buying.

Those calls traded for as much as $5.37 today, over 11 times their purchase prices. The stock rose 53.12% in the same time frame, illustrating the kind of leverage that can be achieved with options.

This marks the third winning trade in the name to be posted on Market Rebellion in the past week.

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.

VALE closed down by 0.58% at $16.19 today after setting a new 52-Week high of $16.45 earlier in the session. The miner’s price target was raised to $17.25 from $14.75 on Thursday at HSBC.