$SIG call prices shine

Bullish option traders are seeing their positions shine today in Signet Jewelers (SIG).

On Oct. 16, Market Rebellion’s Unusual Activity Service flagged the purchase of 12,300 April $22 calls for $1.17 to $1.20 as part of a bullish roll with shares at $15.26. This was clearly fresh buying, as open interest in the strike was just a mere 43 contracts before that session began.

Market Rebellion co-founder Pete Najarian cited the unusual activity at that time on CNBC’s “Halftime Report.”

Those calls are marked for $7.80 currently, 6.5 times their purchase price. The stock rallied 97.12% at the same time, a huge move but still nowhere near that of its options on a relative basis.

It is the second winning trade in the name to be posted by Market Rebellion in as many days.

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.

SIG is trading slightly lower this session down 0.17% to $30.08 but only after reaching a new 52-Week high of $31.44 yesterday, after the jewelry retailer reported holiday sales.