$TLRY bulls spark up gains

It took less than a week for upside option positions in Tilray (TLRY) to spark up gains.

On Oct. 5, Market Rebellion’s Unusual Option Activity Service identified the purchase of 4,500 Weekly $5.50 calls expiring today, Oct. 9, for $0.07 to $0.14 with shares at $4.98. This represented fresh buying, as volume was well above the strike’s previous open interest of 1,360 contracts.

Those calls have traded for as much as $1.18 this morning, more than 8 times their purchase prices. The stock rallied 33.73% 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 this session was last higher by 8.62% at $6.68. The cannabis company has risen alongside its peers today, while the Democratic vice presidential candidate, Kamala Harris, said that under a Biden administration marijuana would be decriminalized at the federal level.