Bulls strike pay dirt in $WPM

Bullish option traders are seeing fast gains today in Wheaton Precious Metals Corp (WPM).

On Jan. 12, Market Rebellion’s Unusual Activity Service detected the purchase of 5,200 January $41 calls for $0.39 to $0.50 with shares at $39.95. Open interest in the strike before the trade occurred was just 764 contracts, showing that this was a new position.

Those calls have traded up to $1.50 today, at least 3 times their purchase prices. The stock rose 6.18% in the same time, 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.

WPM was last at $42.42, up by 7.83% on the day.