$TLRY calls blaze higher

It took less than 24 hours for upside call positions in Tilray (TLRY) to blaze higher.

Yesterday on Dec. 15, Market Rebellion’s Unusual Option Activity Service identified the purchase of 10,000 December $7.50 calls, expiring this Friday, for $0.17 to $0.37 with shares at $7.21. This represented fresh buying, as volume was well above the strike’s previous open interest of 2,134 contracts.

Those calls traded for as much as $2.50 this session, or at least 6.5 times their purchase prices. The stock rallied 38.28% 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 closed the session higher by 18.55% at $9.33. This morning it announced its merger agreement with Aphria (APHA).