Calls prices light up in $TLRY

It took less than 48 hours for upside call positions in Tilray (TLRY) to light up.

On Oct. 19, Market Rebellion’s Unusual Option Activity Service identified the purchase of 11,700 Weekly $6 calls expiring this Friday, Oct. 23, for $0.14 to $0.52 with shares at $5.63. This represented fresh buying, as volume was well above the strike’s previous open interest of 5,146 contracts.

Those calls have traded for as much as $0.95 this morning, or about 3 times their average purchase price. The stock rallied 23.27% in the same time frame, showing how quickly options can far outperform their underlying shares.

It is the second winning trade in the name to be posted on Market Rebellion this month.

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.

TLRY was last higher by 5.59% at $6.61 in morning trading.