$CRON calls surge 15-fold intraday

Cronos Group traded higher today alongside its peers, delivering stellar gains to bullish option positions opened just this morning.

Barely 6 minutes after the opening bell, Investitute’s market scanners found that 2,000 September $16 calls were purchased for $0.05 to $0.15 with shares at $12.85. Volume was above the strike’s open interest of 1,837 contracts, indicating that this was fresh buying.

Those calls spiked to $1.50 less than two hours later, 15 times their average purchase price, with volume surpassing 8,600 by the end of the day. The stock rose 18.44% at the same time, showing how options can exponentially outperform their underlying shares in just a brief period.

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 rallied to $15.30 today before pulling back to close at $12.69, still up 9.78% on the session.  The company, formerly known as PharmaCan Capital, traded today higher along with other names in the marijuana space as investors continue to take notice. After the market closed yesterday the CEO of Tilray was hosted by Jim Cramer on CNBC’s “Mad Money,” as well as news out Monday that Neptune Technologies reached a milestone toward approval to become a Licensed Producer of cannabis oil. All ahead of full marijuana legalization in Canada on Oct. 17.