$LODE bulls score at highs

Comstock Mining (LODE) is surging to fresh multi-year highs today, turning exponential gains on bullish option positions.

On Feb. 1, Market Rebellion’s Unusual Option Activity Service identified the purchase of 5,000 July $6 calls in three prints for $0.70 with shares at $2.77. This represented fresh buying, as that volume was well above the strike’s previous open interest of just 11 contracts.

Those calls this morning have traded for $6.20, more than 8.5 times their purchase price. The stock rose by as much as 255.6% in the same time period, showing how options can far outpace gains in 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.

LODE was last higher on the day by 214.67% at $7.08. The mining company announced that it has secured the rights to a majority equity stake in LINICO Corp., a lithium-ion battery recycling company.