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Bullish Options Traders Blitz Booming Tilray Stock

Karee Venema

The shares of Tilray Inc (NASDAQ:TLRY) are up 21.3% to trade at $97.54, after private-equity firm Privateer Holdings will not sell its TLRY stake when the cannabis company's lockup period expires next Tuesday, Jan. 15. The surge has sparked a rush of activity in Tilray's options pits, and the bulk of the action appears to be of the bullish kind.

By the numbers, more than 68,000 calls and 34,000 puts have changed hands so far -- four times what's typically seen at this point, and total options volume pacing in the elevated 95th annual percentile. The 100-strike call is popular, with buy-to-open activity detected here in the weekly 1/11, January, and February series.

Today's call-skewed trading echoes a recent trend seen among Tilray options traders. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), traders have bought to open 1.49 calls for each put in the last 10 days.

While it's likely that some of this activity is at the hands of traditionally bullish options traders, it's also possible short sellers are using the calls to guard against any additional upside risk. A record 3.86 million TLRY shares are sold short, representing more than 38% of TLRY stock's float.

Looking at the charts, Tilray has certainly turned up the heat on shorts in recent sessions. The weed stock is on track to for a weekly gain of more than 40% -- its biggest since late August -- and is pacing for its first close north of its 40-day moving average since Nov. 7. But while the shares have more than quadrupled from their July 19 open at $23.05, they're far removed from their Sept. 19 record peak at $300.

tlry stock daily chart jan 11