Options News
$BBWI option bears quadruple money
Bath & Body Works Inc (BBWI) is trading lower today, handing big profits to bearish option positions opened last week. On Jun. 21, Market Rebellion’s Unusual Option Activity Service found that 2,500 Weekly $32 puts, expiring this Friday, were bought for $1.08 to $1.15 as part of a bearish spread with shares at $32.84. This was clearly […]
On Jun. 21, Market Rebellion’s Unusual Option Activity Service found that 2,500 Weekly $32 puts, expiring this Friday, were bought for $1.08 to $1.15 as part of a bearish spread with shares at $32.84. This was clearly fresh buying, as the open interest in the contract before the activity appeared was just 5.
Those puts have sold for as much as $5.12 today, over 4 times their purchase prices. The stock fell 18.15% in the same time frame, showing how quickly options can far outperform moves in their underlying shares on a relative basis.
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.
BBWI was last down 9.05% at $26.38.