$CGC call prices spike higher in hours

It has taken just a few hours for bullish option traders to roll up gains in Canopy Growth (CGC).

Just a few hours ago, Market Rebellion’s Unusual Option Activity Service flagged the purchase of 3,300 Weekly $20 calls, expiring on Oct. 23, for $0.15 to $0.36 with shares at $18.72. Volume was above the strike’s existing open interest of 1,620 contracts, indicating that this was fresh buying.

Those calls have already traded for as much as $0.76 so far this afternoon, or at least 2 times their purchase prices. The stock rose 5.77% 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 was last trading higher to $19.75, up by 11.27% on the day.