$TECK calls log fast gains

Bullish option traders are logging fast gains in Teck Resources (TECK) calls today.

Yesterday morning on Apr. 28, Market Rebellion’s Unusual Activity Service detected the purchase of 16,000 May $8 calls for $0.23 to $0.36 with shares at $7.30. This was clearly fresh buying, as volume was well above the strike’s existing open interest of 1,981 contracts.

Those calls have traded up to $1.12 so far today, at least 3 times their purchase prices. The stock rose 22.88% at the same time, showing how quickly options can far outpace gains in 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.

TECK is up 10.23% to $8.94 currently, just off its intraday high of $8.99. The mining company has risen sharply alongside the price of raw materials.