$CCJ call prices heat up

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

On Dec. 4, Market Rebellion’s Unusual Activity Service identified the purchase of 5,000 March $15 calls as part of a bullish roll for $0.20 with shares at $10.94. This was clearly a new position, as open interest in the strike was only 1,383 contracts before the trade occurred.

Those calls have changed hands for as much as $4.50 this session, 22.5 times their purchase price. The stock rose 78.15% 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 was last up by 2.39% to $19.06. The uranium producer has risen sharply year-to-date.