Option traders are scoring big gains on upside positions in Cameco (CCJ) today.
Yesterday on May 31, Market Rebellion’s Unusual Option Activity Service found that 2,600 Weekly $29 calls, expiring Jun. 23, were bought for $0.35 to $0.38 with shares at $26.82. This was clearly fresh buying, as open interest in the contract was just 52 before the activity appeared.
Those calls have traded for as much as $2.44 today, a 542.11% return, while the stock rose 14.43% at the same time, showing how options can far outperform their underlying shares.
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 last up by 10.17% at $30.67.
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