Option traders are scoring big gains on upside positions in Cameco (CCJ) today.
On Jul. 25, Market Rebellion’s Unusual Option Activity Service found that 11,100 Weekly $25 calls, expiring this Friday, were bought for $0.21 to $0.26 with shares at $22.50. This was clearly fresh buying, as open interest in the contract was just 1,878 before the activity appeared.
Those calls changed hands for $0.77 this session, at least 3 times their purchase prices. The stock rose 12.13% in the same time frame, illustrating the kind of leverage that can be achieved with options.
Long calls lock in the price where a stock can be purchased, gaining with a rally and providing leverage to the underlying shares. The contracts can quickly lose value if the stock stalls or pulls back but also carry less risk than owning the shares themselves.
CCJ was up by 8.61% at $25.11.
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