$QSR bulls served hefty profits

Option traders doubled their money in Restaurant Brands today, thanks to strong quarterly numbers.

On April 19, Invesitute’s market scanners identified the purchase of 5,100 May $55 calls bought for $1.40 to $1.60 with shares at $54.50. This was clearly fresh buying, as open interest in the strike was a mere 98 contracts before that session began.

Those calls traded for $3 this morning, twice their purchase prices. The stock rose 5.5% in the same time frame, illustrating the kind of leverage that options can provide.

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 jumped 5.23% to $56.30 today. The restaurant operator, whose chains include Burger King, Popeyes, and Tim Hortons, topped quarterly expectations on the top and bottom lines this morning.