$TLRY call prices light up

It took just two sessions for bullish option traders to see their positions light up in Tilray (TLRY).

On Nov. 19, Market Rebellion’s Unusual Option Activity Service identified the purchase of 4,500 Weekly $20.50 calls expiring tomorrow, Nov. 22, for $0.28 to $0.64 with shares at $19.81. This represented fresh buying, as volume was well above the strike’s previous open interest of 413 contracts.

Those calls have traded for as much as $2.40 this morning, more than 5 times their average purchase price. The stock rallied 15.6% in the same time frame, showing how quickly 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.

TLRY is currently up 7.07% to $22.40. The Canadian pharmaceutical and cannabis company has rallied this week alongside its peers while the MORE (Marijuana Opportunity Reinvestment and Engagement) Act is considered by Congress, having been approved by the House Judiciary Committee yesterday morning in a 24-10 vote.