$CCJ bulls double their money

Option traders are scoring more big gains on upside positions in Cameco (CCJ) today.

On Apr. 27, Market Rebellion’s Unusual Activity Service identified the purchase of 10,000 June $10 calls for $0.64 to $0.67 as part of a bullish roll from a previously winning position with shares at $9.53. This was clearly a new position, as open interest in the strike was only 7,336 contracts before the trade occurred.

Those calls changed hands for as much as $1.45 during this session, at least double their purchase prices. The stock rose 15.01% in the same time frame, 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.

CCJ ended the day up by 5.73% to $10.88. The uranium producer was upgraded to a Buy from Hold at TD Securities this morning with an increased price target of $18, up from $14.