$VFF bulls grow big gains

Option traders are growing big gains on upside positions in Village Farms (VFF) today on positions opened last month.

On Oct. 22, Market Rebellion’s activity scanners flagged the purchase of 9,400 November $6 calls for $0.27 to $0.50 above the open interest of 3,644 contracts with shares at $5.61.

Those calls sold for as much as $2.05 today, at least 4 times their purchase prices. The stock rose 43.67% in the same time period, a large move but nowhere near that of its options on a relative basis.

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.

VFF was up 24.23% at the bell to close at $8.10. The hydroponic vegetable greenhouse business and recreational cannabis producer reported top line growth of 12% in its recent earnings release on Nov. 12.