$CRON calls roll major gains

It took just over a month for upside call positions in Cronos (CRON) to roll higher.

On Jan. 6, Market Rebellion’s Unusual Option Activity Service identified the purchase of 13,300 February $12 calls for $0.28 to $0.38 with shares at $8.63. This represented fresh buying, as volume was well above the strike’s previous open interest of 823 contracts.

Those calls traded for as much as $6.78 this session, or at least 17 times their purchase prices. The stock rallied 82.97% 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.

CRON reached a session high of $15.83 in late day trade and ended up by 14.42% at $15.55. The Toronto-based medical-marijuana company rallied alongside its peers for another session.