PBR Call Prices Pump Towards Highs

Option traders are posting big profits today in bullish positions opened on Petroleo Brasileiro ADR Reptg 2 Ord Shs

(PBR).

On Feb. 25, Market Rebellion’s Unusual Activity Service found that 3,900 18December 20 calls were bought for $0.89 to $0.91 with shares at $16.41.

Those calls have traded for up to $6.50 today, a 614.29% return, while the stock rose 59.78% in the same time frame, showing how quickly options can far outpace gains in 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.

PBR settled the session higher by 2.11% at $26.16.