$PPC call buyers pick profits

Bullish option traders are racking up big gains in Pilgrim’s Pride Corporation (PPC) this session.

On Nov. 6, Market Rebellion’s Unusual Activity Service found that 6,700 March $28 calls were bought for $1.61 above the existing open interest of 1,165 contracts with shares at $26.34.

Those calls were last marked at $5.30 today, a 229.19% return, while the stock rose 27.11% in the same time period, underscoring how options can far outperform 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.

PPC was last at $33.48 late afternoon trade, up 1.52% on the session.