Option bulls score profits in $LAC

Patient option traders are scoring big profits on upside positions opened in Lithium Americas Corp (LAC) over three months ago.

On Aug. 11, Market Rebellion’s Unusual Activity Service found that 4,400 November $22.50 calls, expiring today, were bought for $1.50 to $1.70 above open interest of 290 contracts with shares at $17.63.

Those calls have traded for as much as $15.04 today, over 8.5 times their purchase prices. The stock rose 112.71% at the same time, underscoring how 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.

LAC was last up by 12.17% to $37.23 in afternoon trading.