$WOR bulls make quick gains

Worthington (WOR) has delivered big gains on upside option positions today.

On Jun. 4, Market Rebellion’s Unusual Activity Service flagged the purchase of 3,200 July $35 calls for $1.49 to $1.85 with shares at $33.09. This was clearly fresh buying, as open interest in the strike was only 26 contracts before the activity appeared.

Those calls have thus far traded for as much as $7.00 so far today, at least 3.5 times their purchase prices. The stock rose 24.63% in the same time frame, illustrating the kind of leverage that can be achieved with options.

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.

WOR was last lower on the day by 0.97%, trading at $38.62 after reaching an intraday high of $41.33 earlier in the session. The metals manufacturing company’s shares have risen sharply as its stake in Nikola (NKLA) has grown following a note from KeyBanc on Jun. 4 where analyst Philip Gibbs cited the company’s ownership of 19 million shares.