$QSR calls jump threefold

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

On Jan. 3, Investitute’s tracking systems detected the purchase of 2,000 February $50 calls for $3.75 as part of a bullish spread with shares at $51.67. This was clearly a new position, as open interest in the strike was only 105 contracts before that session began. Investitute co-founder Jon Najarian cited the unusual activity at that time on CNBC’s “Halftime Report.”

Those calls ended today’s session marked at $13.70, more than 3.5 times their purchase price. The stock rose 23.32% 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 was up 1.63% to $63.72 today. The company, which operates the Burger King, Popeyes, and Tim Hortons chains, topped earnings and revenue estimates before the market opened this morning.