$TLRY calls spark gains

It took less than one week for upside option positions in Tilray (TLRY) to turn exponential gains.

Last Friday on Feb. 14, Market Rebellion’s Unusual Option Activity Service identified the purchase of 4,400 February $18 calls expiring tomorrow for $0.36 to $0.42 with shares at $16.79. This represented fresh buying, as volume was well above the strike’s previous open interest of 1,607 contracts.

Those calls traded for as much as $3.05 this morning, more than 7 times their purchase prices. The stock rallied 25.43% 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 10.16% to $20.39 in afternoon trading.