$TUP bulls unseal huge gains

Option traders have unsealed huge gains on upside positions opened in Tupperware (TUP) less than a week ago.

On Jul. 23, Market Rebellion’s Unusual Activity Service flagged the purchase of 5,400 September $8 calls for $1.50 to $1.65 with shares at $7.93. This was clearly fresh buying, as open interest in the strike was only 70 contracts before that session began.

Those calls have traded for as much as $7.70 so far today, at least 4.5 times their purchase prices. The stock rose 97.35% in the same time frame, illustrating the kind of leverage that can be achieved with options.

Long calls lock in the price where a stock can be purchased, gaining with a rally and providing leverage to the underlying shares. The contracts can quickly lose value if the stock stalls or pulls back but also carry less risk than owning the shares themselves.

TUP is up 57.42% to $15.16 this afternoon. The kitchen-storage products icon is up sharply after reporting better than expected earnings before the market opened this morning.