Options News
$ARRY bears score big gains
Bearish option traders racked up huge profits in Array Biopharma (ARRY) today. On May, 10, Market Rebellion’s Unusual Activity Service found that 3,000 May $25 puts, expiring tomorrow, were bought for $1.25 to $1.40 as part of a bearish spread with shares at $25.42. This was clearly fresh buying, as open interest in the strike was just […]
Bearish option traders racked up huge profits in Array Biopharma (ARRY) today.
On May, 10, Market Rebellion’s Unusual Activity Service found that 3,000 May $25 puts, expiring tomorrow, were bought for $1.25 to $1.40 as part of a bearish spread with shares at $25.42. This was clearly fresh buying, as open interest in the strike was just 530 contracts before the activity appeared.
Those puts traded for $10.10 today, more than 7 times their purchase prices. The stock fell 41.23% in the same time frame, showing how quickly options can far outperform moves in the underlying shares.
Long puts lock in the price where a stock can be sold no matter how far it might drop, gaining value in a selloff with the potential for significant leverage. The contracts can be purchased either as an outright bearish bet or a hedge on a long-stock position.
ARRY was higher by 4.6% today to close at $15.24. The biopharmaceutical company missed earnings-per-share estimates during its quarterly report delivered on May 11.