$QSR bulls pick up profits

Bullish option traders posted big profits in Restaurant Brands International (QSR) today, on upside positions opened ahead of its earnings report.

On Apr. 20, Market Rebellion’s Unusual Activity Service identified the purchase of 3,000 May $67.50 calls for $1.27 with shares at $65.93. This was clearly fresh buying, as open interest in the strike was only 1,362 contracts before the activity appeared.

Those calls have traded for $3.75 today, nearly triple their purchase price. The stock rose 6.22% 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.

QSR was last up 2.58% to $70.38 today. The dividend-paying Canadian multinational group of fast food chains topped earnings expectations before the market opened Friday.