$QSR calls double on earnings

Bullish option traders racked up big profits in Restaurant Brands (QSR) today.

On Jul. 29, Investitute’s tracking systems detected the purchase of 2,418 August $77.50 calls for $0.80 with shares at $74.67. This was clearly a new position, as open interest in the strike was only 99 contracts before that session began. Investitute co-founder Jon Najarian cited the unusual activity at that time, as his final trade, on CNBC’s “Halftime Report.”

Those calls have traded for as much as $1.60 today, double their purchase price. The stock has risen 4.67% in the same time period, illustrating 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.

QSR is currently up by 6.5% to $77.50 today, its high for the session thus far. The company, which operates the Burger King, Popeyes, and Tim Hortons chains, topped earnings and revenue estimates before the market opened this morning.