It took less than a week for option traders to hit the jackpot with bullish positions in Outfront Media.
On Sept. 19, Investitute’s market scanners identified the purchase of 2,300 October $22.50 calls for $0.30 to $0.38 with shares at $21.48. Volume was well above the strike’s open interest of 1,672 contracts, indicating that this was fresh buying.
Those calls traded for $2.35 today, more than 7 times original prices. The stock rallied 15 percent in the same time frame, a large move but one that pales in comparison to the gains in its options.
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.
OUT surged 15.35 percent to $24.26 today. The billboard company announced that it has made significant progress toward a contract to advertise on New York’s public-transportation platforms.