$BBRY traders make profitable calls

Upside option positions have posted big gains as BlackBerry’s momentum continued for a second day.

Just yesterday, Investitute’s proprietary programs cited the purchase of 6,700 November $10 calls for $0.51 to $0.94 with shares at $10.51. Volume was double the strike’s open interest of 3,305 contracts, indicating that this was fresh buying. Investitute co-founder Jon Najarian cited the unusual option activity on CNBC’s “Halftime Report” yesterday afternoon.

Those calls traded up to $1.55 late this afternoon, more than 3 times their original price. The stock rose 7.5 percent at the same, underscoring 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.

BBRY jumped 6.78 percent to $11.18 today. The mobile-phone software company beat quarterly estimates on the top and bottom lines before the market opened yesterday.