$TECK calls log quick gains

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

On Dec. 4, Market Rebellion’s Unusual Activity Service detected the purchase of 5,300 December $15.50 calls for $0.43 to $0.57 with shares at $15.55. This was clearly fresh buying, as volume was well above the strike’s existing open interest of 83 contracts.

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

Those calls traded up to $1.05 today, twice their purchase prices. The stock rose 6.1% 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 1.47% to $16.36 currently. The mining company closed above its 50-day moving average yesterday.