Option traders have run up profits in BJ’s Restaurants Inc (BJRI) calls.
On Oct. 17, Market Rebellion’s Unusual Activity Service identified the the purchase of 5,100 January $30 calls for $0.50 to $0.55 with shares at $22.95. Volume was clearly above the previous open interest of 85 contracts, indicating that this was a new position.
Those calls have traded to $1.38 today, a 150.91% return, while the stock surged 21.31% in the same time period, an enormous move but one that was still dwarfed by the gain of its options on a relative basis.
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.
BJRI settled lower by 1.26% to $27.39.
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