$CGC bulls roll up gains

It took just over a week for bullish option traders to roll up gains in Canopy Growth (CGC).

Market Rebellion’s Unusual Option Activity Service flagged bullish option activity in the same contract on two consecutive occasions last week.

–On Jul. 27, 2,300 Weekly $18 calls expiring on Aug. 7 were purchased for $0.25 to $0.47 above open interest of 379 contracts with shares at $17.08.
–And then again on Jul. 28, 5,000 more Weekly $18 calls also expiring on Aug. 7 were purchased for $0.37 to $0.66 above open interest of 3,177 contracts, adding to the previous day’s trade, with shares at $17.23.

Those calls traded for as much as $1.74 so far this morning, or about 3 times their purchase prices. The stock rose 14.05% in the same time frame, showing how quickly options can far outperform their underlying shares.

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.

CGC traded higher to $19.66 this session but has since pulled back, last at $18.94 down 0.63% on the day.